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Why Emirates Won’t Invest in Any Other Airlines

Why Emirates Won’t Invest in Any Other Airlines
Jennifer Billock

Emirates is one of the most wealthy airlines in the world, even though it does one thing differently from all its competitors: The airline will not invest in other airlines around the world, thanks to a small management team and a burned past with the practice.

Almost every major airline does it. They invest in other airlines around the world in a bid to hopefully raise income. But Emirates, one of the wealthiest airlines in the world, isn’t playing that game. The airline has decided not to invest in any other airlines.

Management says it’s due to a need to stay focused: “We are an organic animal and we’re very focused on what we do, how we do it, and where we do it,” Sir Tim Clark, Emirates Airline’s president, told Business Insider. “We’re focused on results. It’s a small, lean management team that run this business and the notion that we’ll be sidetracked by M&A activity, taking on or getting involved with another carrier would be not without its difficulties.”

It’s possible, though, that the hesitance could be due to being burned in the past. In 1998, Emirates invested in Sri Lankan Airlines, acquiring 43.6 percent of the company for $70 million. While the investment was ultimately a success, the road to turn Sri Lankan from a failing airline to a profitable one was rough.

“I was down there between six and eight times a year,” Clark told Business Insider. “Sri Lankan politics was volatile. There was a war going on and we had a lot of problems to deal with.”

The partnership ended in 2008, and left Clark feeling like it really just wasn’t worth the trouble.

“What it taught us, in the end, was that the management time being soaked up in the M&A activity and the subsequent on-going management of these airlines to protect your investment was disproportionate to the return,” he told Business Insider.

[Photo: Shutterstock]

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1 Comment

  1. amnicoll

    May 22, 2018 at 4:34 am

    I have listened to Sir Tim and he speaks an awful lot of common sense (as he does here) and the idea that management can continue to keep their eye on their own company and turn around other basket cases does not seem to me a good option in the airline industry where code shares and alliances offer the customers more routes and options than any so called partnernership

    I can only assume this quote above was part of a wider discussion not reported perhaps relating to the Etihad disaster with Alitalia and Air Berlin where the folly of such an approach is obvious as Etihad cut back and hemorrhage customers

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