SAA and Kenya Airways moot pan-African airline group

SAA and Kenya Airways moot pan-African airline group

South African Airways Airbus A320-200 © Airbus Industrie South African Airways (SA, Johannesburg O.R. Tambo ) and Kenya Airways have announced their intention to form a pan-African airline group to support each other’s growth and take advantage of their hubs at Johannesburg O.R. Tambo and Nairobi Jomo Kenyatta , and possibly also Cape Town .

In a joint statement, the carriers said they had signed a memorandum of co-operation with “a longer-term view to co-starting a pan-African airline group that in time will enhance mutual growth potential by taking advantage of strengths of the two airlines’ busy hubs”. SAA spokesperson Vimla Maistry told ch-aviation that for now, the partnership would be a commercial one only, with future details still to be thrashed out. "There are no plans at this time for any equity shareholding with Kenya Airways. SAA is currently in an advanced stage of its local strategic equity partner deal."

However, SAA’s interim chief executive, Thomas Kgokolo, said in the statement that the memorandum would “in time create the most formidable airline in Africa, benefiting from at least two attractive hubs in Johannesburg, Nairobi, and possibly Cape Town”. The next step is for both parties to set up a joint working group to further discuss the memorandum and put in place systems to achieve their jointly stated objectives, he said.

SAA on September 23 restarted commercial operations following a protracted business rescue process that ended with a ZAR10.5 billion rands (USD694 million) state bailout. It is currently negotiating a strategic equity deal with the Takatso consortium that will see the South African government give up 51% shareholding, with a view to further privatisation that would see the government retain a 33% "golden share" .

From SAA’s side, Kgokolo said the understanding with Kenya Airways was part of its broader growth strategy to become a major player in regional travel. “This joint memorandum with Kenya Airways, one of the continent’s strongest and most respected carriers, will do just that. […] 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,” he said.

Kenya Airways’ chief executive officer, Allan Kilavuka, highlighted the partnership’s significance in turning around the fortunes of both airlines. “The future of aviation and its long-term sustenance is hinged on partnership and collaboration. […]

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