Etihad-Emirates combo: Hyperloop to the rescue?

Reports out this week have Emirates and Etihad once again circling around a potential merger. The nuance varies with each round but the general concept remains: Combine the flight operations into a single, stronger carrier. The reduced competition would help boost fares while reducing overlap in services and back office needs. But the plan also presents two very interesting challenges, one political and one geographical.

On the political front is the question of whether the Emirs really want to see their pet projects combine. Over the years Emirates President Sir Tim Clarke has been asked many times about such consolidation (including folding flyDubai into Emirates) and he always defers to the “shareholders” to make such decisions. In the case of these airlines the shareholders are UAE royalty and any such plan would require cooperation on their part. It is not impossible to believe this can happen, but it is also far from a straight financial decision.

Assuming the politics are resolved the geography of a merger comes into play; this issue is arguably harder to solve. Dubai (DXB) and Abu Dhabi (AUH) airports are just 72 miles apart. That is further than some other city-based airport twins such as Haneda and Narita or Heathrow and Gatwick, but it is spectacularly close for a pair of hubs run by the same airline. That challenge is even more pronounced when considering the passenger traffic profile the two airlines carry. The vast majority of travelers use Abu Dhabi and Dubai as a connection point, not a destination. Splitting those connections across airports 72 miles apart is horribly inefficient, particularly when considering traffic in the region. This challenge is further compounded by the fact that Dubai International Airport is at capacity and built in the middle of the city; expansion is not an option.

Two options could solve this problem, though neither is likely to be realized in the immediate future. Combined, however, they could redefine the travel experience in the UAE and beyond.

Directly between the two cities sits Dubai World Central Airport (DWC). The field sits on a massive plot of land with more runways and room to grow the terminal facilities. It should scale to handle a combined operation of the two airports but its location presents a problem. It is not in either city and, as noted above, traffic is a problem. Convincing airlines or passengers to fly to DWC proved a massive failure so far. Only a handful of passenger flights operate daily (cargo operations are more significant) and load factors on those are generally low. The airport has space and plans to grow, but without forcing airlines to shift operations expect those plans to sit unused.

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The other half of the solution is an ultra high speed rail system, either Hyperloop or something akin to that type of operation. Dedicated tracks with redundancy and sufficient capacity to move passengers between terminals in under five minutes is a game-changer for airport operations. There are many challenges with such systems, including proving that they can maintain vacuum over longer distances and still offer emergency exits and other necessary safety assurances. And they’re likely to be incredibly expensive and not as efficient over shorter distances because of the acceleration and deceleration portions of the trip.

But passengers today are accustomed to similar length trips between terminals at major airports. Most travelers won’t care about the distance covered so much as the transit time. There is an opportunity to solve the problem, an opportunity that is under discussion with some major airport operators. Including Dubai Airports.

Airport executives initially broached the topic at trade shows and conferences with a focus on in-town check-in services. The idea was to save on terminal construction by using existing structures where the amenities already exist rather than rebuilding a mall experience next to the runways. That might help for the local traffic segment but is less useful for connecting travelers. And this region must cater to the connections.

Terminals are still necessary. Large terminals to handle the volume of passengers connecting and the increased volume that will connect as the runway operations are optimized across multiple fields. But the quick transit between the terminals help reduce redundancy of facilities and construction costs. Or, in the case of Emirates and Etihad, it combines the two hub airports into a single operation. An incredibly powerful and compelling operation. An operation that takes the existing competitive advantages and magnifies them.

And it is crazy enough that it just might work.