Both airlines, owned by Dubai's sovereign wealth fund Investment Corporation of Dubai (ICD), will continue to be managed independently, but they will leverage each other's network to scale up their operations and accelerate growth, added Emirates.
The partnership unites two complementary models and will unlock "immense value", said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive officer of Emirates Group and chairman of FlyDubai. Emirates' profits fell 70 percent in the year ending on March 31; economies in the Gulf region slowed, demand for seats aboard flights declined due to terrorist attacks and the airline contended with travel restrictions imposed by the USA government.
Emirates cited fierce competition and a "relentless rise" in the United States dollar as the main factor in falling revenues. 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 partnership will strengthen the position of both airlines and allow them to optimize use of their respective fleets with a greater ability to adjust aircraft capacity size according to route demand", said John Strickland, aviation industry consultant at JLS Consulting.
"The innovative partnership goes beyond code-sharing and includes integrated network collaboration with coordinated scheduling". The move means FlyDubai's regional flights will help fill Emirates jets, while the discount operator gets access to a global network of 157 destinations.
An Emirates spokesperson declined to comment on whether plans would be hatched to construct an internal link between flydubai's hub Terminal 2 and Emirates' Terminal 3. Or a passenger from Hyderabad can take flydubai to Dubai and then fly Emirates to mainland Europe, America, Africa or South America.
"Both airlines have grown independently and successfully over the years and this new partnership will unlock the vast value that the complementary models of both companies can bring to consumers, each airline and to Dubai".
Emirates, the largest airline in the Middle East, flies to 157 destinations with 259 planes, while low-priced airline Flydubai reaches 95 destinations with 58 planes. The current combined network comprises 216 unique destination points.