Kenya Airways, SAA hunt for investor for pan-African plans

Kenya Airways, SAA hunt for investor for pan-African plans

Kenya Airways Boeing 777-300ER Kenya Airways (KQ, Nairobi Jomo Kenyatta ) and South African Airways (SA, Johannesburg O.R. Tambo ) are planning a series of investor roadshows to help find a financial backer for a combined airline group they aim to create next year, Bloomberg reports.

The campaign will see events staged in Africa, London, and the United States to attract a majority investor for a holding company to be modelled on the IAG International Airlines Group . It is likely to start before the end of the northern-hemisphere summer, Kenya Airways Chief Executive Officer Allan Kilavuka said in an interview on Thursday at the CAPA Airline Leader Summit.

The governments of Kenya and South Africa plan to take a minority stake in the venture, which has the working name Pan-African Airline Group, Kilavuka said.

The carriers are also seeking to recruit a third member from West Africa, most likely in Nigeria, Ghana, Côte d’Ivoire, or Senegal, he disclosed.

Kilavuka suggested the carriers could consolidate their global alliance membership, with Kenya Airways quitting Skyteam or SAA exiting Star Alliance . KLM Royal Dutch Airlines , the Dutch arm of Air France-KLM , could also exit its roughly 7% holding in the Kenyan airline, he added.

He said the focus was on securing backing from a financial institution rather than an industry partner like a Gulf carrier, as that might compromise plans to split long-haul flights between Nairobi Jomo Kenyatta and Johannesburg O.R. Tambo , the carriers’ respective hubs. A possible scenario would be for SAA’s Johannesburg hub to be the focus for southern-hemisphere operations, such as flights to Australia, while operations to Asia would go through Nairobi. The hubs would be able to maintain some competing flights, and cities such as London would get services from both.

Kilavuka has been increasingly vocal about the planned alliance, whereas SAA has remained more discreet in its disclosures. Asked for comment, SAA Chief Commercial Officer Simon Newton-Smith this week told ch-aviation : "SAA and Kenya Airways are laying the foundation to build a pan-African airline group and welcome potential partners from across the continent, including West Africa to enhance our service offering to our customers". He earlier said the goal was to achieve an extensive reciprocal codeshare partnership by June 2022. By June 2023, the aim is to harmonise schedules and terms and conditions on pricing, pending anti-trust immunity in core markets. Newton-Smith stopped short of confirming an […]

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