Kenya Airways, Precision Air seek extension of waiver from rivalry rules

Kenya Airways Embraer 190 airplane. 

Photo credit: File | pool

Kenya Airways (KQ) has applied for an extension of a special exemption granted two years, allowing for the creation and sharing of revenues on routes serviced in a joint venture pact with Tanzania’s Precision Air.

The Competition Authority of Kenya (CAK), in its latest report for the financial year to June 2023, said that the application is under review.

“The airlines applied for exemptions on coordination on a number of aspects of the services offered, including reciprocal code-sharing, alignment and coordination of management activities and pricing of ticket fares,” said CAK.

In 2018, the two competing airlines sought an exemption from CAK because, under the JV, they would share sensitive information contrary to provisions of section 21(3) of the Competition Act. This allowed them reciprocal code-sharing on the routes operated by the two airlines.

The deal also enables the two airlines to coordinate their network activities, align fares on the JV routes, coordinate management of revenue on the routes, and coordinate marketing and sales.

CAK granted KQ and Precision a four-year exemption to extend their JV until April 11, 2022. KQ owns a 41.23 percent stake in Precision Air Services which it acquired in 2003.

KQ flies to more than 42 destinations across the world, while Precision offers scheduled and chartered air passenger and cargo transportation services with domestic flights within Tanzania and regional flights to Nairobi and Moroni.

CAK says that the two airlines had earlier reached out to it requesting an advisory opinion on whether they could extend the JV agreement exemption upon its expiry.

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