The partnership will go "beyond code-sharing and include integrated network collaboration with coordinated scheduling", said the carrier.
Dubai based carrier Emirates is entering a broad partnership with low-priced operator Flydubai, which will include a codeshare and optimisation of the airlines' networks.
Dubai's government-controlled Emirates Airline, the worldwide carrier of the United Arab Emirates (UAE), said here on Monday it agreed with budget carrier flydubai to expand their codeshare agreement and align their frequent flyer programs.
Flydubai passengers will have "seamless connectivity" to the Emirates long-haul network, while Emirates says it will benefit from the low-priced operator's regional service.
"Both airlines have grown independently and successfully over the years and this new partnership will unlock the huge value that the complementary models of both companies can bring to consumers, each airline and to Dubai".
The two airlines also plan to develop a joint hub at Dubai International Airport, aligning their systems and operations to ensure a "seamless travel experience". The 216 destinations they now fly to will rise to 240 by 2022.
Together the two will fly to 216 destinations and have a combined fleet of 317 wide-body aircraft and Boeing 737s, including 259 Emirates planes and 58 Flydubai craft.
The arrangement follows indications from Emirates president Tim Clark that the two airlines would deepen their relationship over the coming 18 months to boost synergies as both carriers face tough economic conditions. Additionally, this will help both airlines feed more traffic into each other's complementary networks.
Work on combining a number of areas such as network planning and frequent-flyer programmes is already under way and the group said it expects the first new code sharing agreements to be in place in the final quarter of this year. "Further details will be communicated as they become available", Emirates said. By 2022, the combined network of Emirates and flydubai is expected to reach 240 destinations, served by a combined fleet of 380 aircraft.
Both airlines, which are owned by Investment Corporation of Dubai, will remain under separate management teams.