The financial situation ofEtihad - The Abu Dhabi-based carrier's future is hanging in the balance because of its rating, which has been severely downgraded by the carrier's unfortunate investments in "lame ducks", and the fierce competition from its rival Emirates and its rival Qatar Airways. A few months ago, the rating agency Fitch indicated that the airline would continue to lose money until at least 2022 and that it would remain the smallest of the three global carriers in the region. Last year Etihad lost 1.52 billion dollars 3.5 billion over two years. For the past year, it has been involved in a severe restructuring exercise which saw the closure of a dozen routes, the introduction of chargeable services for passengers and the cancellation of aircraft orders. And there's more to come, according to the company's new CEO, Tony Douglas.
The information released by Bloomberg on Thursday afternoon refers to preliminary talks between Emirates and Etihad with a view to merger of the two carriers. Bloomberg was told that this information was obtained from four employees on condition of anonymity.
Such a merger would bring more benefits than drawbacks. It would rationalise a plethora of air services, with numerous redundant routes between Abu Dhabi and Dubai, only a hundred kilometres apart.
The merger will also create the world's largest airline in terms of passenger numbers, ahead of American Airlines.
The two companies have, of course, denied any talk of a possible merger. Admittedly, a merger is unlikely in the short term, especially as the Emirate of Abu Dhabi has invested heavily in a brand new airline. new terminal with a capacity of 84 million passengers, four and a half times more than the current hub. Its inauguration has already been delayed twice, with the opening date now estimated at 2019. As Etihad's hub, it would be a bad omen for Abu Dhabi to see its main airline disappear or at least merge with Emirates. Especially as the Emirate also continues to support tourism in Abu Dhabi, now seen as an essential element in its economic diversification. A logical and certainly irreversible merger, but one in which the national pride of each Emirate still carries all its weight. But for how much longer?
