The signing of the Strategic Partnership Framework by the two African airlines will see both airlines work together to increase passenger traffic, cargo opportunities, and general trade. Picture: EPA/KIM LUDBROOK
The signing of the Strategic Partnership Framework by the two African airlines will see both airlines work together to increase passenger traffic, cargo opportunities, and general trade. Picture: EPA/KIM LUDBROOK

Kenya Airways and SAA seek to create new Pan African airline group by 2023

By Travel Reporter Time of article published Nov 25, 2021

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By The Exchange

Kenya’s national carrier, Kenya Airways PLC (KQ), has signed a Strategic Partnership Framework with South African Airways (SAA), a key milestone towards co-starting a Pan African Airline Group by 2023.

The partnership framework follows the Memorandum of Cooperation (MoC) that the two airlines signed two months ago to foster the exchange of knowledge, expertise, innovation, digital technologies, and best practice between the two airlines.

The signing of the Strategic Partnership Framework by the two African airlines will see both airlines work together to increase passenger traffic, cargo opportunities, and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.

It is expected that the partnership will improve the financial viability of the two airlines. Customers will also benefit from more competitive price offering for both passenger and cargo segments.

The signing of the Strategic Partnership Framework was witnessed by President Uhuru Kenyatta and his South African host, President Cyril Ramaphosa on the second day of President Kenyatta’s three-day State visit to South Africa.

The Strategic Partnership Framework was signed by KQ Chairman Michael Joseph and SAA Chairman John Lamola in Johannesburg South Africa.

The partnership framework aligns well with the aspirations of the Africa Continental Free Trade Area Agreement (AfCFTA) of providing a single market for goods and services, facilitated by the movement of persons and goods to deepen the economic integration and prosperity of the African continent. It also includes demand recovery and other costs containment strategies which will aid the recovery of both carriers in an increasingly competitive African airline environment.

Speaking at the signing ceremony, KQ Chairman Michael Joseph said, “This cooperation aligns with Kenya Airways’ core purpose of ‘Contributing to the sustainable development of Africa’; and is based on mutual benefits. It will increase connectivity through passenger traffic, cargo opportunities, while enhancing the implementation of the Africa Continental Free Trade Area Agreement (AfCFTA). The geolocation of the two countries will make the Pan-African Airline Group attractive by creating the most formidable Airline Group that is expected to take advantage of strengths in South Africa, Kenya, and Africa.”

Both airlines remain committed to their financial turnaround strategy. One of the pillars to achieve this is coming together and combining assets to provide a more robust and ultimately competitive aviation ecosystem to pursue the commercial viability of both carriers.

On his part, SAA Chairman said, “The Strategic Partnership Framework will improve the financial viability of both airlines by creating the most formidable air transport connection in Africa by benefiting from at least two attractive hubs of Johannesburg and Nairobi. It will ignite the Kenya and South Africa tourism circuits, which account for significant portions of the respective country’s GDP,” said SAA Chairman John Lamola.

As reported by The Exchange Africa on September 30, the two airlines entered into the MoU a longer-term view to co-starting a Pan-African Airline Group that in time will enhance mutual growth potential between the two carriers.

Commenting on the initiation of the deal, 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 challenges.’’

He added that the airline remained 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.”

SAA’s Interim CEO Thomas Kgokolo noted that the cooperation, which includes demand recovery and other cost containment strategies, will aid the recovery of both carriers in an increasingly competitive airline environment.

He added that the deal would also enhance related and 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.

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