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 in particular has been hit by currency fluctuations, geopolitical uncertainty and U.S. travel restrictions leading it to post an 82 percent drop in profit in May, its first decline in five years. "For Emirates' customers, it opens up flydubai's robust regional network", Emirates said, announcing the agreement on Jul. 17.
"The innovative partnership goes beyond code-sharing and includes integrated network collaboration with coordinated scheduling".
Emirates says the airlines will still be managed independently but will "leverage" one another's networks to "scale-up operations" and speed expansion.
Six years after Flydubai ceased contracting maintenance to Emirates Engineering, the no-frills carrier has agreed a new deal with its full-service neighbour.
The airlines' statement adds that the partnership will be rolled out over the coming months, with the first enhanced code-sharing arrangements starting in the last quarter of 2017.More news: Software makers boost India's Sensex, Nifty to record
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Emirates and flydubai will also align airport systems and operations at their hub at Dubai International Airport, the world's busiest for international travel.
The current joint fleet size is 317 with a combined network of 216 unique destinations.
By 2022, Emirates and flydubai will operate a combined fleet of 380 aircraft flying to 240 destinations, the statement said.
Teams from Emirates and flydubai are now working on several initiatives spanning commercial, network planning, airport operations, customer journey, and frequent flyer programmes alignment.
FlyDubai uses 95 smaller Boeing 737s, with no provisions yet for passenger transfer to other carriers, including Emirates.
While both airlines are owned by the Investment Corporation of Dubai (ICD), a government organization, historically the two have had very different route networks, aircraft and operating styles.