12 January 2008
Dubai: Emirates on Friday said it is not interested in buying a stake in British Airways after rumours of the Dubai firm's potential bid pushed the UK carrier's shares higher in London trading.
"Emirates has no interest in taking a stake in British Airways. We are concentrating on our own organic growth," a spokeswoman told Gulf News.
The market speculation boosted BA shares as much as six per cent during the day but the stock eased following the denial. Emirates similarly denied last year talk of a bid for a BA stake.
A London-based aviation industry analyst said Emirates may be too busy with its own rapid expansion at present to think about buying into the British company. "It may seem something that could happen but I do not think it is by any means an obvious or an easy possibility," JLS Consulting director John Strickland told Gulf News.
Unlike capacity constraints felt by British Airways at its Heathrow base, Emirates has huge room for growth from Dubai International Airport, which will see its capacity grow to 70 million passengers annually within three years. The airline has ordered more than 200 planes to serve its growing network.
Strategy
"They have a very clear development strategy, they are able to tap into many new traffic flows, which would never be accessible to many European carriers so why would they bother to do it [take a stake in British Airways]," Strickland said.
The only airline in which Emirates has invested is SriLankan but the Dubai firm is planning to sell that stake after it decided to terminate a 10-year management contract for the airline.
Emirates is hoping to get $150 million for its 43.6 per cent share in SriLankan, which will go back to government management when the agreement expires on March 31.
Emirates president Tim Clark has said Colombo was "seeking greater control over the day-to-day business of the airline, which was not acceptable to us."
By Shakir Husain
Gulf News 2008. All rights reserved.
