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Is The Creation of The World’s Biggest Airline Just One Merger Away?

Is The Creation of The World’s Biggest Airline Just One Merger Away?
Jeff Edwards

Bloomberg reports that Emirates is in negotiations to take over Etihad Airways and is closing in on a deal that would make the newly formed airline the biggest in the world by at least one metric. Officials at both carriers have publicly denied that merger talks are underway, but multiple unnamed sources close to the preliminary discussions say that a potential agreement would see Emirates assume control of the bulk of Etihad’s operations.

Emirates has reportedly entered preliminary negotiations to take over rival Gulf carrier Etihad Airways. One possible deal would see Emirates taking over most of Etihad’s operations, with the smaller company continuing to provide maintenance operations. Both of the U.A.E-based carriers have denied that talks are taking place, but multiple media outlets are reporting that sources close to the discussions have confirmed that a potential merger is on the table.

Citing four unnamed sources, Bloomberg reports that negotiators have hammered out a tentative agreement that would require approval of the rulers of the two rival sheikdoms within the U.A.E. where each carrier is based. Because of the sensitive political concerns surrounding the negotiations, those involved are said to be unwilling to publicly acknowledge the talks which could create the largest airline in the world by passenger traffic.

Etihad, which has faced mounting financial pressures in recent years, has been the subject of takeover rumors in the past. In each case, both Etihad and potential suitors have denied the merger speculation. Emirates, as well as German-flag carrier Lufthansa, have repeatedly denied reports that either of the airlines are interested in obtaining a controlling interest in the struggling Etihad.

Depending on how much consolidation would be required following a merger deal between Emirates and Etihad, the newly formed airline would be the biggest in the world by at least one key measurement. According to the most recent International Air Transport Association (IATA) World Air Transport Statistics, the two Gulf carriers combined account for more “passenger kilometers flown” than current leader American Airlines. The fact that the two U.A.E-flagged carriers are primarily long-haul carriers makes this a slightly misleading metric for crowning the world’s largest airline. By most other statistics including passengers flown, daily flights, fleet size, revenue and destinations served, American would remain the world’s largest airline by far – even if the two Gulf carriers formed a single airline without eliminating any route map redundancies.

[Photo: Shutterstock]

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1 Comment

  1. Bretteee

    September 26, 2018 at 9:02 am

    The UAE don’t need 2 large airlines. Abu Dhabi is only 1 hour 15 minutes from Dubai by car.

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