Mystery: Why Don’t Emirates & FlyDubai Merge?


To play armchair airline CEO for a moment, I can’t wrap my head around why Emirates and FlyDubai don’t merge. Is it just me?

The relationship between Emirates & FlyDubai

Emirates and FlyDubai are the two major airlines based in Dubai:

  • Emirates operates to destinations around the globe using Airbus A380s and Boeing 777s
  • FlyDubai operates mostly to regional destinations (as far east as Europe, and as far west as Asia) using Boeing 737s

Both airlines are owned by the government of Dubai. Going back several years, there was very little cooperation between the two airlines. Coordination between the carriers has increased significantly over the past five years. For example, the airlines now have extensive codeshare agreements, FlyDubai uses Emirates Skywards as its frequent flyer program, and the two airlines even sometimes swap routes seasonally, based on demand.

It’s also worth noting that Emirates is of course known globally for being a full service airline, while FlyDubai is more of a hybrid carrier. The airline has business class on all planes (and has announced a new business class that looks better than anything Emirates offers), and most fare types in economy include complimentary meals.

Emirates & FlyDubai already have a partnership

Emirates & FlyDubai should just merge, already

I’ve wondered about this for years, as it’s a mystery to me. Why don’t Emirates and FlyDubai outright merge? It seems I’m not alone in feeling this way. Back to 2017, Emirates President Tim Clark (who is one of the smartest guys in the industry) essentially hinted at this:

“We are minded to accelerate a greater joining of the hip, of what we do, there’s a lot of work going on there to extract value for the shareholder. We could do things better together than apart.”

While we’ve seen closer cooperation, the airlines have stopped short of a full-on merger. This is different than a merger between Emirates and Etihad, which has been rumored for as long as the airlines have been around, but seems unlikely. That’s because the airlines have different owners (Dubai vs. Abu Dhabi), and there are also politics and prestige at play. But in the case of Emirates and FlyDubai, the airlines have the same owners, yet are largely managed separately.

To be balanced, let’s start by taking a look at some of the benefits of the airlines operating independently:

  • FlyDubai staff are on a different pay scale, so there are some savings to be had there
  • FlyDubai would need to update its product a bit to get in line with Emirates, by offering free meals and drinks to all passengers
  • If Emirates feels the same level of quality can’t necessarily be provided on FlyDubai, the airline could be protecting its brand by trying to keep FlyDubai separate

Now let’s take a look at some of the benefits of the airlines merging and operating as one:

  • There would be massive synergies in terms of being on a single Air Operator Certificate, consolidating management positions and central functions, etc.; currently there’s so much unnecessary, duplicate work going on
  • There would be huge synergies and value in marketing, since two airlines wouldn’t need to be branded separately anymore, and effort could instead be put into promoting the Emirates brand
  • It would eliminate consumer confusion, as most people outside of the region don’t know what FlyDubai is, and might be hesitant to book an itinerary including travel on the airline
  • It would allow Emirates to greatly expand its route network, given that there are many destinations Emirates can’t fly to with its large aircraft, both due to airport limitations and demand; for example, Emirates serves significantly fewer destinations than Qatar Airways and Turkish Airlines
  • It would allow Emirates to more efficiently utilize its fleet, using aircraft with capacity that’s more closely aligned with demand on a year-round basis; some destinations might be able to support a 777 in summer but only a 737 in winter
  • The current system is incredibly inefficient in terms of partnerships, since airlines need to separately establish codeshare agreements with Emirates and FlyDubai, even though the two partnerships serve the same purpose (connectivity out of Dubai)
  • Many passengers feel more comfortable booking a connection the whole way through on one airline (like Turkish Airlines, Qatar Airways, etc.), rather than a mixed carrier itinerary, in terms of irregular operations, checking bags, and more
  • In the past I could see the argument that Emirates’ fleet was all about being simple and streamlined with just 777s and A380s, but with the airline soon taking delivery of 787s and A350s, that consistency is gone
  • FlyDubai has greatly upped its game when it comes to the premium experience; the airline has a solid fully flat business class product in service, and has a new business class suite planned, which beats what Emirates offers in 777 business class
  • A lot of airlines would have major issues with a merger in terms of getting unions and work groups to get onboard, but that’s not an issue Gulf carriers face
FlyDubai has an impressive new business class

The precedent is very much there for an integration like this to happen. While slightly different, we’ve also seen SilkAir be folded into Singapore Airlines, Cathay Dragon be folded into Cathay Pacific, and Thai Smile now being folded into Thai Airways. This simply makes sense, as the pros outweigh the cons.

So, why hasn’t it happened? There are only three logical theories I can come up with:

  • Maybe Emirates is worried about being able to provide a seamless experience at Dubai International Airport, given that the airlines primarily operate out of different terminals; maybe this merger could happen if/when Dubai World Central Airport becomes Emirates’ home
  • Maybe the airlines have slowly been working toward merging, but the pandemic slowed that process down; maybe the airlines think it’s easier to first cooperate closely and then merge, to minimize the amount of work that needs to be done at that point
  • Maybe there’s some pride or politics at play that I’m not privy to; on the surface it seems like the airlines would be aligned based on them both being owned by the government of Dubai, but maybe there’s something else going on behind the scenes that complicates this
Those planes would look snazzy in the Emirates livery!

Bottom line

Emirates and FlyDubai have the same owners, and also have the same goal, which is to connect the world to and through Dubai. It seems to me like it would make perfect sense for the two airlines to finally merge, given the endless benefits to doing so.

With Emirates soon planning on having four aircraft type anyway, adding a fifth aircraft type with significantly different capacity seems like it could be a huge asset, and greatly expand Emirates’ network and connectivity. Interestingly Emirates’ President has been hinting at the possibility of the two airlines merging for many years, but it hasn’t yet happened.

What’s your take on why Emirates and FlyDubai haven’t merged? Do you think it will happen?

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