“We can make it very simple, very easy: There’s no truth to the rumour. No truth. And end of story.”
That’s Hubert Frach, Emirates head of commercial operations for Europe and the Americas. He’s in England this week touting Emirates’ new service to Edinburgh. He further told Gulf News:
It’s publicly available news. We have a couple of agreements with them, for instance group security has a memorandum of understanding (MoU), so we look at synergies, but the talk about a merger — there’s not truth in it.
Ok, we got it. But actions speak louder than words. Despite such a strong denial, the synergies are there. And by that I mean Emirates can eat Etihad and raise fares. Etihad serves 74 destinations: Emirates serves all but nine of those. Places like Chengdu, Nagoya and Riga.
There’s no rational argument to be made, in my mind, that Emirates needs Etihad. Flydubai, rather than Etihad, served as the natural complement. Emirates would prefer Etihad just disappear. And that, I think, could the game plan. Oh sure, there would be some longhaul flights out of Abu Dhabi. But don’t forget Dubai World Central (DWC), the new Dubai airport is almost halfway between Dubai International (DXB) and Abu Dhabi (AUH). Etihad is simply unnecessary.
The only thing I see that would stand in the way of a merger is Emirati pride. Abu Dhabi is rich in oil while Dubai boasts international acclaim as a tourist destination. Abu Dhabi actually bailed out Dubai during the 2008 Financial Crisis and holds 90% of the oil reserves in the United Arab Emirates. That’s a powerful bargaining chip.
Perhaps Emirates’ so firmly denies a merger with Etihad because it is just waiting for Etihad to fully implode. Etihad wisely fired James Hogan and seems to be on the road to recovery, but still faces long-term strategic hurdles. Personally, I’d like to see both airline remain. I love them both. But both still seem unsustainable, even as they unify in seeking to limit Qatar Airways’ threat through questionable diplomatic action.
Do you think an Etihad – Emirates merger is inevitable or unlikely?