An impression of Abu Dhabi’s Midfield Terminal, now under construction

An ultimate merger between Emirates and Etihad has been talked about for around ten years and the latest reports in the German media out of the ITB Travel Show in Berlin have been swept aside by Emirates president Tim Clark.

His interview, rejecting the gossip, comes at the end of this very revealing Bloomberg report by Andrea Rothman.

Much more relevant is what her report conveys about the concerns Emirates has about the rise of low cost long haul airlines, as well as the strategic decisions his successor will have to face in dealing with them, and the consideration of adding a single aisle type to the giant Dubai carrier’s fleets of Airbus A380s and Boeing 777s (including 150 of the forthcoming 777-X series due from 2020).

Clark is very frank about the sudden opportunities that have arisen in the Middle East for single-aisle operations to meet demand from within Arab nations rather than that of connecting traffic using global hubs like those of Dubai or Abu Dhabi, the home of Etihad.

And he has always been frank about the opportunities that will arise from the development of the much larger Al Maktoum or Dubai World Central Airport part way between Dubai and Abu Dhabi.

Although Clark says Emirates is making only a fraction of the money it has made in previous years, it clearly remains a very profitable airline, and one that has seen some rebounding in its fortunes in recent months despite the impact of the US travel bans saga.

The same can’t be said of Etihad, which has pursued a different strategy of building a global network of influence through minority stakes in European, Indian Ocean and India carriers, and of course, in Virgin Australia Holdings. It is clear that the sovereign owners of Etihad want to see rising returns from their aviation investments, something frustrated to some extent by the misfortunes of AirBerlin and Alitalia.

A successor to Tim Clark hasn’t been found, but he has referred to that time being nigh on several occasions in recent months. Much of the speculation about an ultimate merger of the Dubai and Abu Dhabi carriers has come from those with little knowledge of how the federation of absolute monarchies that is the UAE actually works. Until Mr Clark declines to comment on speculation about such a merger it can be taken as read that the notion of a merger isn’t working.  Yet, if not forever.

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