Air France and KLM merged in 2004 and KQ is seeking to expand the alliance as the French carrier prepares to launch flights to Kenya in April.
The Competition Authority of Kenya (CAK) has asked for interested parties’ views to enable it make a decision on the matter.
Kenya Airways’ #ticker:KQ bid to expand its joint venture (JV) agreement with KLM to include Air France has moved closer to implementation after the competition watchdog invited stakeholders to submit their views on the revised pact.
Air France and KLM merged in 2004 and KQ, as the national carrier is known by its international code, is seeking to expand the alliance as the French carrier prepares to launch flights to Kenya in April.
The Competition Authority of Kenya (CAK) has in the latest Kenya Gazette invited interested parties to send submissions before February 13 to enable it make a decision on the JV amendment application.
“The proposed amended JV provides for commercial activities between Kenya Airways, KLM and Air France as follows; reciprocal code sharing on the joint venture routes,” said Wang’ombe Kariuki, the CAK’s director-general.
“Alignment and co-ordination of network management activities with respect to the JV including terms of routes, schedules and capacity; alignment and co-ordination of management of all revenues attributable to the joint venture.”
The revised JV will also allow the three carriers to conduct concerted marketing and sales activities, align and coordinate pricing of tickets as well as exchange of staff in select areas.
These allowances contravene the competition law as they amount to restrictive trade practices, prompting the application by the three carriers for an exemption from CAK.
KLM and KQ entered into a “master co-operation agreement” in 1995, which has seen them share revenues on certain routes based on a pre-determined ratio after deducting expenses.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
