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Kenya Airways, SAA now plan to launch regional airline 2023

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A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG

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Summary

  • Kenya Airways (KQ) and South African Airways (SAA) have moved closer to establishing an African airline in 2023.
  • This is after the two carries signed a Strategic Partnership Framework in South Africa yesterday, in a move which will see the two carriers eventually form a Pan-African carrier.

Kenya Airways (KQ) and South African Airways (SAA) have moved closer to establishing an African airline in 2023.

This is after the two carriers signed a Strategic Partnership Framework in South Africa Wednesday, in a move which will see the two carriers eventually form a Pan-African carrier.

The signing happened on the back of an official visit by President Uhuru Kenyatta to the South African nation, a move expected to unlock trade, tourism and aviation sectors.

The signing of the partnership will see the two African airlines work together to increase passenger traffic, cargo opportunities, and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.

It is expected that the partnership will improve the financial viability of the two airlines. Customers will also benefit from more competitive price offerings for both passenger and cargo segments.

“This cooperation aligns with Kenya Airways’ core purpose of contributing to the sustainable development of Africa and is based on mutual benefits,” said KQ chairman Michael Joseph in a statement yesterday.

“It will increase connectivity through passenger traffic, cargo opportunities while enhancing the implementation of the Africa Continental Free Trade Area Agreement (AfCFTA).”

The signing of the deal comes barely a few months after African airlines agreed to pursue a consolidation model at a workshop hosted by African Airlines Association (AFRAA).

Both KQ and SAA have been loss-making for years.

KQ, as the carrier is known by its international code, posted a Sh11.49 billion net loss in the six months ended June— a 19.8 percent cut from the Sh14.33 billion loss it incurred in the preceding similar period, taking its accumulated losses over the years to above Sh127 billion.

KQ says the long recovery prospects and diminishing revenue in an environment of increased costs due to tight health and safety measures mean it will require a bailout to stay afloat.

The persistent underperformance of the airline has led to huge losses and loss of market share to rival firms.

As a result, the government has opted to nationalise the carrier by buying out the minority shareholders with hopes of turning around its dwindling fortunes. On the other hand, South Africa’s embattled national carrier emerged from bankruptcy last week, flying its first plane in the last 18 months. It has not been operating flights since March 2020.