South African Airways (SA, Johannesburg OR Tambo) and Kenya Airways (KQ, Nairobi Jomo Kenyatta) have signed a strategic partnership framework agreement to form a Pan-African airline group by 2023.
This follows a memorandum of cooperation signed two months ago to foster closer cooperation in terms of the exchange of knowledge, expertise, innovation, digital technologies and global best practices.
In what they called “a key step” towards a pan-African enterprise, the airlines said in a joint statement that they will now work together to increase passenger traffic, freight opportunities and trade in general.
They expect the partnership to improve the financial viability of both airlines and offer more competitive prices for passengers and freight customers. The alliance will also use the carriers’ respective hubs in Johannesburg OR Tambo (South Africa) and Nairobi Jomo Kenyatta (Kenya) to boost tourism in both countries in the wake of the COVID-19 pandemic. It also includes demand recovery and other cost containment strategies that would contribute to the recovery of both carriers in an increasingly competitive African aviation environment.
Both airlines have said they remain committed to their respective financial recovery strategies. “One of the pillars for achieving this is coming together and combining assets to provide a more robust and ultimately more competitive aviation ecosystem in order to continue the commercial viability of both carriers. The partnership will improve the financial viability of the two airlines by creating Africa’s most formidable air transport connection, ”they said.
Kenyan President Uhuru Kenyatta and his South African counterpart Cyril Ramaphosa witnessed the signing of the partnership agreement by the presidents of the two airlines on the second day of Kenyatta’s three-day state visit to South Africa .
The airlines said their partnership was aligned with the aspirations of the African Continental Free Trade Agreement (AfCFTA) which aims to provide a single market for goods and services on the continent.
Speaking at the signing ceremony, Kenya Airways Chairman Michael Joseph said the alliance would take advantage of the two countries’ geographic position. “The geolocation of the two countries will make the Pan-African Air Group attractive by creating the most formidable air group which should take advantage of the strengths of South Africa, Kenya and Africa,” he said.
SAA emerged from bankruptcy protection on April 30, 2021, thanks to a ZAR 10.5 billion (US $ 662.6 million) taxpayer-funded bailout to absorb the debt burden history of the national carrier. The government is currently engaged in a long process of negotiating a sales agreement with a privileged strategic partner, the Takatso consortium, which includes black empowerment partner Harith General Partners and specialist ACMI Global Aviation Operations (GE, Johannesburg OR Tambo).
SAA resumed commercial operations on limited national and regional routes on September 23, 2021, but has since made several adjustments to its regional network based on passenger volumes and inbound revenue. Citing low demand, it removed Maputo (Mozambique) from its daily schedule as of December 1, 2021, and made adjustments to flights to Accra (Ghana), Kinshasa N’Djili (DRC) and Lusaka (Zambia), citing less than expected demand, while bookings on two new routes to Lagos (Nigeria) and Mauritius are encouraging, he said.
Kenya Airways is also looking to the country’s treasury to settle its $ 250 million debt. The Treasury had previously guaranteed loans of $ 750 million. A recovery and cost reduction plan is being developed in consultation with London consultants Steer Group. As South Africa seeks to relinquish majority state control over its national airline, Kenya is keen to renationalize Kenya Airways, but the necessary legislation has been delayed through parliamentary processes. The government currently owns 48.9% of the airline.
Kenya Airways has also signed a strategic cooperation memorandum of understanding with Congo Airways (8Z, Kinshasa N’Djili) which will see the two national carriers join forces in the areas of capacity sharing, aircraft maintenance and training. . The two-year agreement includes a route and code-sharing provision aimed at expanding national, African and international carrier networks.