The partnership includes code-sharing, network collaboration, coordinated scheduling, and alignment of frequent flyer programmes.
"The new model will give flydubai customers seamless connectivity to Emirates' worldwide destinations spanning six continents. For Emirates' customers, it opens up flydubai's robust regional network," flydubai said in a statement.
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By 2022, the combined network is expected to reach 240 destinations, served by a combined fleet of 380 aircraft, as per the statement.
Both airlines will, however, continue to be managed independently. The two carriers are owned by the state-owned holding company- Investment Corporation of Dubai (ICD) and are operated independently under separate management teams.
The partnership will be rolled out over the coming months, with the first enhanced code-sharing arrangements starting in the last quarter of 2017.
The two airlines will also develop their hub at Dubai International airport to align their systems and operations.