Kenya, South Africa seek to launch pan-African airline

South African Airways (SAA) and Kenya Airways have signed a cooperation agreement with a long-term view to create a Pan African airline group that will in time will enhance mutual growth potential by taking advantage of strengths of the two airlines’ busy hubs.

In a statement on Wednesday, Kenya Airlines said: "It’s not a merger but a partnership that seeks to re-organize its own assets along with those of SAA into an ecosystem that will make the South African and Kenyan aviation sector more competitive."

SAA said the pact did not preclude either firm from pursuing commercial cooperation with other carriers and said collaborating would help contain costs.

The two airlines are signing a memorandum of co-operation in this regard, SAA announced in a statement. The view is that such a pan-African airline group could, in time, "enhance mutual growth potential by taking advantage of strengths of the two airlines' busy hubs".

State-owned SAA restarted domestic flights last week and this week it will launch a scaled-down international service to five African capitals after its longstanding financial problems were exacerbated by the COVID-19 pandemic.

According to the Memorandum of Cooperation, the two airlines would cooperate in the economic, technical, maintenance and repair, and take advantage of opportunities to achieve economies of scale.

The SAA said this would help in the standardization of product and service offering that is in line with current global aviation trends.

"As well as being a strong local carrier, part of our broader growth strategy is to become a major player in regional travel and this joint memorandum with Kenya Airways, one of the continent's strongest and most respected carriers, will do just that," said SAA interim CEO Thomas Kgokolo. "Part of SAA's core remit is to be a significant enabler of business and trade in Africa and it's through a strategic understanding like this that real progress will be made in advancing South Africa and the continent's growth."

Kenya Airways CEO Allan Kilavuka said the partnership would assist in turning around the fortunes of both airlines.

"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 home-grown organic solutions to technical and operational challenges," he said.