LONDON: Emirates and flydubai have confirmed plans to integrate their operations as they respond to tough competition among global airlines.
The tie up means that the pair can mop up excess capacity on both of their networks as a global glut of planes forces fares lower.
Both airlines will continue to be managed independently, but will leverage each other’s network to scale up their operations and accelerate growth, Emirates said.
The partnership goes beyond code sharing and will include network integration as well as the coordination of scheduling.
“Both airlines have grown independently and successfully over the years, and this new partnership will unlock the immense value that the complementary models of both companies can bring to consumers, each airline, and to Dubai,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Group and chairman of flydubai.
The two airlines also plan to develop their hub at Dubai International, aligning their systems and operations.
Emirates operates a wide-body fleet of 259 aircraft, flying to 157 destinations (including 16 cargo-only points) while flydubai has 58 new-generation Boeing 737 aircraft flying to 95 destinations. The current combined network comprises 216 unique destination points.
— Emirates airline (@emirates) July 17, 2017
By 2022, the combined network of Emirates and flydubai is expected to reach 240 destinations, served by a combined fleet of 380 aircraft.
They said they were also working on a number of initiatives spanning commercial, network planning, airport operations, customer journey, and frequent flyer programs alignment.
The first enhanced code-sharing arrangements are set to be rolled out in the last quarter of 2017. Further details will be communicated as they become available.
The price of global air travel was about 10 percent cheaper in the first quarter of 2017 than a year ago after adjusting for inflation, according to data from the International Air Transport Association (IATA).
That has hurt airlines based in countries with dollar pegs because of the continued strength of the greenback, which has helped many rival European carriers offer more competitive fares.
IATA says that in seasonally adjusted terms, international traffic through the Middle East has been tracking sideways since the start of the year.
As the competitive environment heats up, Gulf carriers are being forced to take a closer look at their cost structures to fend off fare-slashing by rivals.Aggressive fare discounting by competitors, a slowing economy at home and regional instability have hit both airlines.