Emirates Etihad is two of the premium airlines from the United Arab Emirates. The two airlines headquarters are just 70 kilometers apart. Emirates Etihad is in different Emirates of the UAE. Etihad has its head offices is in Abu Dhabi. However, Emirates is based in Dubai.
Why Is There a Possibility of Emirates Etihad Merger?
There is an increase in competition among all segments of the market. The premium or luxury segment is not alien to the concept of price cuts. Therefore, there is a possibility of Emirates Etihad merger taking place.
There are many reasons why airline industry experts believe in the possibility of Emirates Etihad merger.
- The proximity of the two suggests that by joining forces, they could potentially save a lot of money.
- There is an indication by some European news outlets that the ruling families of the UAE had a meeting to discuss the possibility of a merger.
- There is a decline in profits due to increase in competition. Therefore, a fast-changing industry needs a proactive approach in handling the underlying commercial issues.
- There is no confirmation or denial either by Etihad or Emirates about the accuracy of the news.
Emirates’ CEO’s Hint Towards the Merger
The CEO of Emirates hinted a few days ago about a rising storm in the airline industry. He particularly pointed towards the premium or luxury segment of the airline industry. He has indicated towards significant factors impacting the profitability of the airline including cost as well as the increase in competition.
Furthermore, he did point out to the increase in competition on both local and international destinations. He has also pointed towards the political issues severely impacting the industry. Particularly, Trump’s travel ban on Muslims that has seen a decrease in travel by 25% for the Middle Eastern carriers.
The Past Rumors of Etihad Emirates Merger
It is not the first time Etihad Emirates merger rumors are emerging. There were rumors of the merger of the two airlines back in 2008 because of the financial crisis. However, at that time both the carriers had denied any truth to the rumors. However, since the times are tough now, there may be a possibility of the merger taking place.
Airbus May Suffer Due to the Merger
The aviation industry believes that Airbus will be facing the most significant loss in case of an Emirates Etihad merger. Since both, the airlines are not happy with the A380’s performance so far. Both own a large fleet of the A380s. In case of a merger, they are expected to consolidate assets, and it may impact their total number of aircraft procurements from Airbus.
