Companies

KQ and partners accused of monopolistic alliances

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A KQ Dreamliner aircraft. FILE PHOTO | NMG

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Summary

  • Kenya Airways and its partners have been accused of commercial collaborations that amount to monopolistic practices on the routes they control, according to a report by Africa’s regulatory agencies.
  • KQ, as the national carrier is known by its international code, has commercial agreements and joint ventures with Tanzania’s Precision Air and Europe’s Air France and KLM.

Kenya Airways #ticker:KQ and its partners have been accused of commercial collaborations that amount to monopolistic practices on the routes they control, according to a report by Africa’s regulatory agencies.

KQ, as the national carrier is known by its international code, has commercial agreements and joint ventures with Tanzania’s Precision Air and Europe’s Air France and KLM.

“The joint venture that Kenya Airways has with Precision Air, KLM and Air France have facilitated their market share growth in the respective regional and international markets,” says a report by African Competition Forum (ACF).

“There is little to no price competition among members of these joint ventures. Therefore, these routes are monopolistic in nature.”

The cross-country airlines study was commissioned to understand the continent’s aviation market and address competition concerns, with regulators representing a total of 24 African countries including Kenya participating in the initiative.

The report says that airline alliances may help to facilitate cartel behaviour among airlines to the detriment of consumers.

It could create disadvantages for travellers, such as higher prices and poor quality of services due to limited competition on certain routes or less frequent flights.

The commercial agreements have helped KQ and its partners expand their reach including through code share deals.

A code share flight is a flight that is marketed by one carrier and operated by another. Code share flights come about as a result of agreements between airlines to sell seats on each other’s flights in order to provide passengers with a wider choice of destinations.

The ticket would be booked on the flight number of the airline that you have booked your travel, however it may be operated by another carrier.