Sir Tim Clark, president of Dubai-based Emirates has once again discounted the possibility that the airline might merge or even acquire Etihad Airways which is based just 70 miles away in Abu Dhabi. There have seen several high profile rumours in recent years that the two carriers were involved in merger talks but so far any cooperation has been limited to sharing very specific back-office functions.
Rumours of a possible merger largely came to prominence because of Etihad’s financial difficulties and the belief that there simply wasn’t enough demand for two airlines pursuing the same market of passengers. The heavily loss-making airline had also embarked on a disastrous equity investment scheme that ended with the carrier recording a $4.7 billion loss over three years.
“Etihad is a much leaner airline than it was three or four years ago, and it’s far more fit for purpose than perhaps it was,” commented Sir Tim in a recent interview. The implication being that any need to merge the two airlines no longer existed.
Chief executive Tony Douglas has dramatically scaled back Etihad’s ambitions and is starting to pursue a different strategy than that of Emirates and regional competitor Qatar Airways.
“Etihad was improving its situation. It wasn’t a very good situation but it was getting better. Emirates was on a roll up until January, we were going to finish one of our best financial years,” he said. “So if you remove COVID, where were we? We were both getting on with our jobs,” Clark continued.
Sir Tim did, however, concede that any final decision wouldn’t be his to make but rather the rulers of Dubai and Abu Dhabi.
“The two remain ultra-competitive. My own view is that they’re both good and will be strong enough to remain separate, operate as competitors, and do the right thing for the population of the UAE, and also be very good in what they do in the international market,” Clark said of the rivalry between Emirates and Etihad.
“If you can get through the next couple of years then there’s a fighting chance of things being fine.” If however, the COVID-19 pandemic disrupts demand for air travel longer than just a few years then perhaps we could be revisiting the idea of Emirates and Etihad merging all over again.
