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Emirates and Etihad can 'work more closely'

October 12, 2017

For the past decade, UAE airlines Emirates and Etihad have competed fiercely against each other. However, a merger or some kind of fusion may be closer than previously thought, according to Emirates boss Tim Clark.

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Emirates Airline Flugzeug
Image: C. Furlong/Getty Images

The president of Emirates has not ruled out a future merger with rival airline Etihad, saying the United Arab Emirates carriers would benefit if they worked more closely together.

Speaking to Reuters, Tim Clark said that while a full merger was unlikely at the moment, it was ultimately something the owners of the airlines would have to decide.

"I think there is value to be had working more closely with them," Clark said. "There are many areas that the airlines could work together on like procurement," he added, referring to purchasing and spending strategies.

"But we have to go the first jump first to understand what it is we could do and I‘m simply the manager of one of the businesses. It is my superiors who have to make that call, not me."

Referring to a possible future merger, Clark, a former head of Sri Lankan Airlines, said: "I don't think that will be the case but it is not my call, really. It is whatever (the shareholders) may do in the future."

Good neighbours make good friends?

The airlines are both government-owned — Emirates, the bigger and older of the two having been founded in 1985, is owned by the government of Dubai while Etihad, founded in 2003, is owned by the Abu Dhabi government.

Both have competed with each other from their bases 115 miles apart (186km) on the Persian Gulf and have tried to build globally competitive networks in an increasingly challenging aviation market. Etihad has been hit recently by major financial problems in Alitalia and Air Berlin, two European airlines it invested heavily in.

In response to Clark's comments, an Etihad spokesman said future co-operation was possible. "We constantly seek opportunities for innovative collaboration with other organisations, where it makes business and commercial sense," the statement read.

Etihad recently announced the appointment of British businessman Tony Douglas as its new CEO, part of an attempt to rethink its global operation.

Emirates currently employ around 65,000 people, about three times as many as Etihad. Their fleet size and list of routes is also substantially bigger.

A tour of Abu Dhabi

aos/kd (Reuters)