Emirates and flydubai expand ties

DUBAI (Reuters) – Emirates, the Middle East's largest airline, and budget carrier flydubai are expanding their commercial relationship to create a combined fleet of 380 jets flying to as many as 240 destinations by 2022.

The airlines, both owned by the government of Dubai, said in a statement on Monday their expanded partnership would be rolled out over the coming months, kicking off with an enhanced code share agreement in the fourth quarter.

The push to work closer comes amid pressure on profits. Emirates' annual profit fell in the year ended March 31 for the first time in five years and flydubai's profit fell for a second consecutive year in 2016.

The carriers already have an "interline" agreement, which allows passengers to catch connecting flights on either airline without checking in again, but unlike a code share such deals don't usually cover coordinated flight times, joint marketing or reciprocal frequent flyer benefits.

The new partnership will include joint network planning, coordinated schedules and the frequent flyer programmes will be aligned though both airlines will remain independently managed, the joint statement said.

"The biggest benefit the two airlines can achieve will be to develop network complementarily, reducing some current duplication and providing new customer itineraries," independent aviation consultant John Strickland told Reuters.

"There will be greater flexibility on aircraft size also according to demand on a given route," he said.

Emirates, launched in 1985, and flydubai, which started operating in 2009, fly to several of the same destinations, particularly in the Middle East and South Asia.

However, Emirates only operates wide-body Airbus A380s and Boeing 777 aircraft, whereas flydubai flies narrowbody Boeing 737s.

By 2022, Emirates and flydubai will operate a combined fleet of 380 aircraft flying to 240 destinations, the statement said.

The current joint fleet size is 317 with a combined network of 216 unique destinations. The airlines have more than 300 aircraft on order between them.

Emirates and flydubai, which had previously flagged a closer relationship, said they did not anticipate any redundancies as a result of the new partnership.

"This partnership isn't about savings, it's about extracting commercial value by leveraging the strengths of both companies to accelerate growth," representatives from the airlines said.