Report: Emirates in talks to buy Etihad

Bloomberg is reporting that Emirates is in talks to buy loss-making airline Etihad. A deal could substantially increase Emirates’ presence at Heathrow.

London Air Travel » Emirates

Emirates Airbus A380 Heathrow
Emirates Airbus A380 Heathrow (Image Credit: Heathrow)

The financial woes of Etihad have been well documented.

It pursued what can only be described as an absolutely disastrous strategy of acquiring minority stakes in troubled European airlines that haemorrhaged cash. It has been heavily loss making, having reported a loss before exceptional items of USD$ 1.52 billion for 2017.

Etihad has abandoned its strategy of pursuing aggressive growth. It has been cutting routes such as Dallas Fort Worth, Entebbe, Jaipur, San Francisco, Tehran, and Venice.

It has also been reviewing its expansive aircraft order book which has included 21 Boeing 787-9, 30 Boeing 787-10, 25 Boeing 777X and 62 Airbus A350 wide body aircraft. It had also been seconding pilots to Emirates.

Bloomberg has reported today, Thursday 20 September 2018, that Emirates is in talks to acquire Etihad. It includes an official non-denial denial from Emirates and Etihad spokespersons that neither “comment on speculation”.

There are clear attractions to Emirates in not only eliminating a nearby rival but also having access to its aircraft order book. It could also substantially increase Emirates’ presence in London.

Given the close proximity of Abu Dhabi to Dubai it’s unlikely that Emirates would pursue a “dual hub” strategy (think BA’s unsuccessful dual “hub without the hubbub” strategy at Gatwick in the 1990s) and is likely to be more focused on point-to-point traffic for Abu Dhabi.

Emirates currently operates six Airbus A380 departures from London Heathrow with additional flights from Gatwick and Stansted.

With Etihad having three departures a day from Heathrow to Abu Dhabi and it also owning Alitalia’s slots, which currently operates six daily departures to Italy, a deal could more than double Emirates’ capacity at Heathrow. It goes without saying this would be a major competitive headache for many rival airlines.

Looking further afield, Etihad also owns a stake in Virgin Australia. Given Emirates’ partnership with Qantas, Etihad would have to dispose of its stake in Virgin Australia and its abandon its partnership for competitive reasons.

Emirates Heathrow lounge closed for refurbishment until October 2015

London Air Travel » Emirates

Emirates’ lounge at London Heathrow Terminal 3 is currently closed for refurbishment until October 2015. The lounge closed on Monday 8 June 2015.

In the meantime, eligible passengers can use the British Airways Galleries Lounge.

However, BA has said access to its lounge for Emirates passengers will not go beyond 12 October 2015. The reason for this is that BA will begin to move some long-haul flights from Terminal 5 to 3 in October which will obviously increase demand for the lounge.