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Emirates And Flydubai Enter Into Partnership To Strengthen Position

Emirates And Flydubai Enter Into Partnership To Strengthen Position
Image credit: Emirates

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Middle East aviation giant Emirates and its sister entity, the economy airline flydubai, announced a partnership on Monday, by which the two Dubai-based airlines will leverage each other’s network to scale up “operations and accelerate growth,” while continuing to be managed independently. To be rolled out over the coming months, an Emirates’ statement on the partnership says, “enhanced code-sharing arrangements [will be] starting in the last quarter of 2017.”

The association, however, is said to extend beyond code-sharing, and aims to help create better linkages for passengers of both airlines, bring in more passenger traffic, align the frequent flyer programs, and includes initiatives that can help optimize flight networks by way of coordinated schedules. Further, the alignment will also see the two airlines work together to jointly develop their hub at Dubai International airport (currently the world’s busiest for international passengers). The combined network is expected to serve 240 destinations globally with a fleet of 380 aircrafts by 2022.

In a statement, H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman and chief executive, Emirates Group and Chairman of flydubai said he considers the agreement “an exciting and significant development for Emirates, flydubai, and Dubai aviation,” and expects it to “unlock the immense value that the complementary models of both companies can bring to consumers, each airline, and to Dubai.” With Emirates profit falling 82% in the year ended March 31, 2017, and FlyDubai also seeing a 68% dip in profits for the period ended December 2016, it perhaps makes business sense for both airlines to work together, to avoid eating into each other’s revenue and for cost-saving purposes.

However, a Bloomberg report on Monday notes that while efforts have been on for a few months now to align the two carriers (both fully owned by the Investment Corporation of Dubai), the tie-up comes with its own challenges. “Emirates has a fleet of 259 Airbus SE A380 and Boeing Co. 777 wide-body jets that serve major cities worldwide via three daily waves of departures that allow people to switch easily between flights; FlyDubai, by contrast, deploys 95 Boeing 737-800 narrow-bodies on point-to-point operations with no advertised transfers,” says the report, noting the difference in operational structures.

Related: H.H. Sheikh Ahmed Bin Saeed Al Maktoum: Powering The Engines Of Prosperity To Dubai Expo 2020 And Beyond