- At this initial stage, it is not a merger but a partnership that seeks to re-organise KQ and SAA assets into an ecosystem that will make the South African and Kenyan aviation sector more competitive.
Kenya’s national carrier Kenya Airways (KQ) and South Africa Airways (SAA) have entered a memorandum of cooperation with a longer-term view to co-starting a Pan-African Airline Group that in time will enhance mutual growth potential between the two carriers.
This cooperation aligns with KQ’s core purpose, ‘Contributing to the sustainable development of Africa’, will be based on mutual benefits. These include strategic positioning in global aviation, diversifying earning streams, and reinforcing regional partnership in Africa through diplomatic and commercial relations. This will see an increase in passenger traffic, cargo opportunities, and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.
Mr. Allan Kilavuka, Kenya Airways Group Managing Director and Chief Executive Officer, highlighted the partnership’s significance in turning around the fortunes of both KQ and SAA.
“The future of aviation and its long-term sustenance is hinged on cooperation. KQ and SAA collaboration will enhance customer benefits by availing a larger combined passenger and Cargo network, fostering the exchange of expertise, innovation, best practice, and adopting home-grown organic solutions to technical and operational
KQ remains committed to its financial turnaround strategy. The pursuit of partnerships is one of the core strategic pillars that shall transform the airline by ensuring its financial viability while offering world-class services in Africa and the world.
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SAA’s Interim CEO Thomas Kgokolo noted that “This cooperation, which includes demand recovery and other cost containment strategies, will aid recovery of both carriers in an increasingly competitive African airline environment. It will also enhance related Kenya and South Africa tourism circuits, which sectors account for significant portions of respective country growth domestic product, benefiting from at least two attractive hubs in Johannesburg, Nairobi and possibly Cape Town. 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.’’
The respective Kenyan and South African governments recognise KQ and SAA as strategic national assets. They are committed to providing an operating environment that will allow for commercial agility and flexibility, shared access to domestic and international markets for the carriers’ mutual benefit.
Kgokolo adds that collaboration will also assist both airlines in the current and post-pandemic business and travel environment. This he says involves, joint recovery strategies and other cost containment strategies that will aid recovery of both carriers in an increasing competitive African airline environment.
This agreement does not offer an exclusivity that precludes either of the airlines from pursuing commercial cooperation with other carriers within the current route network strategy.
As a key driver of economic growth, the aviation sector enables quick movement of passengers and cargo, leading to increased economic activity, generating direct and indirect employment. The recognition of this significance to economic development is the impetus behind the cooperation. This cooperation also seeks to address the significant contraction witnessed in the history of the air transport market in the wake of COVID-19.
The African air transport market is estimated to be 50% of 2019 (pre-COVID-19), and the situation is expected to last for at least three years.