Kenya Airways, South Africa Airways have long-term plan for pan-African airline group

Reuters | Kenya Airways (KQ) and South African Airways (SAA) and have signed a cooperation agreement with a long-term view to create a pan-African airline group, the two companies said on Tuesday.

“It is not a merger but a partnership that seeks to re-organize KQ and SAA assets into an ecosystem that will make the South African and Kenyan aviation sector more competitive,” Kenya Airways said in a statement.

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

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

It exited administration in April thanks to another state bailout, and the government has said it will sell a 51 percent stake in the airline to a local consortium.

Kenya Airways’ passenger business has also been severely constrained by COVID-19, and it has focused on cargo to minimize losses.

Kenya has plans to renationalize the airline, whose code-share agreement with Air France-KLM for Africa-Europe routes ends this month.