South African Airways (SAA) and Kenya Airways have announced they are in talks over forming a pan-African airline. The two carriers have signed a memorandum of co-operation to create an airline group that would “take advantage of the strengths of the two airlines’ busy hubs.”
While the long-term goal is to form a pan-African airline, short-term collaboration will include combining passenger and cargo networks, sharing innovation and expertise, and improving customer experience.
SAA and Kenya Airways sign memorandum
SAA and Kenya Airways have signed a memorandum of co-operation to form a pan-African airline group in the future. The two loss-making airlines believe a single airline group would maximize growth potential and take advantage of each carrier’s strengths.
Allan Kilavuka, Chief Executive Officer at Kenya Airways, said,
“The future of aviation and its long-term sustenance is hinged on partnership and collaboration. Kenya Airways’ and South African Airways’ collaboration will enhance customer benefits by availing a larger combined passenger and cargo network, fostering the exchange of expertise, innovation, best practices, and adopting homegrown organic solutions to technical and operational challenges.”
While forming a pan-African airline is more of a long-term goal, the two airlines will begin co-operating earlier. According to ch-aviation, this will include ‘shared services in route networks, fleet, and capacity deployment and exploring economic, technical, maintenance, repair, and overhaul opportunities to achieve economies of scale.’
Thomas Kgokolo, Interim Chief Executive Officer at South African Airways, added,
“KQ and SAA, as iconic airline brands of Africa’s biggest and vibrant economies, in East Africa and Southern Africa respectively, are at the precipice of what could be Africa’s formidable pan-African airline.”
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A bright future for two troubled airlines?
It’s no secret that both SAA and Kenya Airways have been in troubled waters for years now. Through co-operation and the eventual co-forming of a new airline group, the two airlines hope to improve their outlook in the current and post-pandemic aviation world.
SAA was in administration for almost 18 months until April, with a takeover bid currently going through the formalities. Kenya Airways has been the subject of a nationalization bid from the Kenyan government, with the bill still awaiting its third reading in parliament.
Both airlines have been making a loss for years, with Kenya Airways posting its worst losses ever for the fiscal year 2020. Additionally, cash-strapped Kenya Airways is not expecting any kind of bailout package from the government, despite CEO Kilavuka stating that the airline is technically insolvent and needs around $500 million for its short-term debts.
On the bright side, SAA restarted commercial operations after an 18-month hiatus due to the COVID pandemic. The airline flew its first flight back on September 23rd from Johannesburg to Cape Town.
What do you think about South African Airways and Kenya Airways forming a pan-African airline group? Let us know your insights in the comments.