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Queries as KQ, South Africa Airways set to consolidate operations

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A KQ Dreamliner aircraft. FILE PHOTO | NMG

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Summary

  • The planned partnership to form a Pan African Airline by Kenya Airways and South African Airways has left aviation pundits at a crossroads on the airline network that the two carriers will join.
  • The two airlines already belong to different networks and aviation experts opine that how this issue will be addressed is bound to be a challenge.
  • Kenya Airways is a member of the Sky Team — the second-largest airline network — while South African carrier belongs to Star Alliance, so far the largest of the three major aviation clubs with a membership of 28 airlines.

The planned partnership to form a Pan African Airline by Kenya Airways and South African Airways has left aviation pundits at a crossroads on the airline network that the two carriers will join.

The two airlines already belong to different networks and aviation experts opine that how this issue will be addressed is bound to be a challenge.

Kenya Airways is a member of the Sky Team — the second-largest airline network — while South African carrier belongs to Star Alliance, so far the largest of the three major aviation clubs with a membership of 28 airlines.

The partnership of the two carriers had been announced sometime in November. However, it came as a surprise on December 31 when President Uhuru Kenyatta said the two airlines will combine their assets to form a Pan-African carrier, becoming a high ranking member in the planned merger.

“To boost tourism, trade, and social engagement; and to bolster continental integration; our national carrier Kenya Airways will join hands with our partners in South Africa to establish a Pan-African Airline with unmatched continental reach and global coverage,” said Mr Kenyatta in the New Year address.

The two carriers have remained tightlipped on their mode of operation once they join hands.

It is believed the merger deal was sealed when Mr Kenyatta recently visited South Africa and that operations are expected to commence next year.

“We are all in the dark over this deal. No one knows the kind of partnership that the two will join,” said an aviation expert.

Alliance membership is an important association in airlines as it comes with a number of benefits. Members of the same alliance can establish a code-sharing where they agree to conduct bookings on behalf of a certain carrier and connect passengers from a given country to their final destination.

For instance, a passenger travelling from Nairobi on a KLM flight to the US can connect to America through a Delta flight, which are both members of the Sky Team alliance.

Questions also linger on what will happen to the loyalty miles that customers have accumulated over the years and whether those points will be accepted by other airlines after these two carriers quit their respective alliances.

Passengers normally accumulate points when they are travelling with a given airline and those points can be redeemed in any of the carriers as long as they are in the same membership.

In 2020, South Africa granted Kenya Airways a third freedom right, allowing it to fly cargo from Johannesburg to other cities in Southern African countries without returning to its hub in Nairobi.

The partnership between the two carriers comes at a time when they are both struggling financially. SAA was declared bankrupt a while back, a move that saw it ground its services for months before resuming again last year.

Kenya Airways has been on a loss-making streak long before even the coronavirus crisis hit the aviation sector.

The carrier lost more than $100 million in the six-month period that ended June 30, 2021, losses that the national carrier attributed to Covid-19 pandemic.

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

Kenya Airways signed a Strategic Partnership Framework with South African Airways last November, which formed a key milestone towards co-starting a Pan African Airline Group by 2023.

The partnership framework followed the Memorandum of Cooperation that the two airlines signed in September to foster the exchange of knowledge, expertise, innovation, digital technologies, and best practice between the two.

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