Dubai-based carriers Emirates and flydubai will build on their strong strategic partnership with new code-share routes this year in a bid to optimize flight options, increase passenger numbers, and boost profitability.
Through this partnership — which began in October 2017 with code-share flights to 29 cities — passengers flying Emirates now have access to 67 more destinations, while flydubai customers enjoy access to 115 additional destinations.
The partnership "has not only delivered tangible benefits to our collective customers, but also to both airlines in terms of the synergies that come with working closely together, for example reducing route overlaps and the realignment of schedules to common destinations,” said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group and Chairman of flydubai.
The network of code-share flights will expand in 2019, with the launch of new flydubai destinations – Naples and Budapest. On January 20, flydubai will restart flights to Chittagong. Flights to Kozhikode, Kerala, will start from February 1.
"While the EK-FZ pact is not just about organic expansion and integration of routes, together the economies of scale will help combat uncertainty with respect to fuel costs (single source supplies etc) as well as monetary fluctuations and of course, the questions over Brexit, given that the UK is a very high yield, high traffic market for Emirates," said Saj Ahmad, cheif analyst at StrategicAero Research.
Added benefits to airline passengers
The partnership also provides one integrated loyalty program along with the convenience of travelling on a single ticket with point to point baggage handling. This means that both Emirates and flydubai passengers can earn Skywards Miles through the Emirates Skywards program and enjoy shared travel benefits when flying across the combined networks. The two airlines together currently reach 216 destinations, which by 2022, is expected to expand to 240, offering customers across the world far-reaching global connectivity via Dubai.
"We could see further alignment with respect to staffing, airport operations as well as procurement, engineering and cargo. This teamwork is in its infancy and so Emirates and flydubai have a lot of cards yet to play – all of which ultimately benefit their customers," said Saj Ahmad.
Impact on the aviation sector
With increasing volatility in oil prices, raised trade tensions and a strong dollar pressuring profit margins, code-sharing partnerships such as this help airlines keep a check on their costs, tap new markets, increase reach in under-served demand and boost profitability. Qatar Airways, which is one of Emirates' main competitors in the region, is also looking at similar code-sharing agreements with budget airlines GoAir and Indigo. The leading long-haul airline in the aviation sector Emirates posted lower-than-expected profits while Etihad reported a second consecutive annual loss in 2018.
"Middle Eastern carriers are expected to report an $800 million net profit in 2019, up from a weaker $600 million in 2018. The region reported 4.7% capacity growth in 2018 and is expected to slow to 4.1% in 2019, which together with restructuring is helping to generate a recovery," said a December outlook report released by the International Air Travel Association.