Kenya Airways & South African Airways Plan Alliance

Kenya Airways & South African Airways Plan Alliance

18

Two struggling African national airlines plan to join forces, and I’m curious to see how this plays out…

Details of Kenya Airways & South African Airways partnership

Kenya Airways and South African Airways are two (largely) government owned airlines that have been struggling to survive for a long time. South African Airways even entered business rescue in 2019, and only emerged from that in May 2021, though the airline is much smaller than it used to be.

It seems that the two airlines plan to work together soon. While this had been rumored for a long time, it was officially confirmed by Uhuru Kenyatta (the president of Kenya) during his New Year’s state address. During this he said the following:

“To boost tourism, trade, as well as social engagement, and to bolster continental integration, our national carrier Kenya Airways will join hands with partners in South Africa to establish a Pan-African airline, with unmatched continental reach and global coverage.”

I think it’s worth calling out that some media outlets are suggesting that the two airlines are fully merging and forming a new airline. That’s not my read on the situation, but rather I think the two airlines plan to cooperate closely and form an alliance… of course I could be wrong. While Kenyatta references a “Pan-African airline,” personally I wouldn’t take that so literally. Similarly, I wouldn’t take the suggestion that the two airlines will offer “unmatched” global coverage too literally. 😉

South African Airways no longer has long haul aircraft

What could cooperation between the airlines look like?

When it comes to the global airlines in Africa, Ethiopian Airlines is really the shining star in terms of sustainable, profitable growth. Meanwhile airlines like Kenya Airways and South African Airways have struggled with whether the priority is profitability or prestige and global coverage.

This is purely speculation on my part, but what could an alliance between Kenya Airways and South African Airways look like?

  • If this does happen, I wouldn’t expect this to be a full-on merger, but rather I would expect this to probably be closest to an airline joint venture
  • I expect we could see Kenya Airways and South African Airways codeshare, offer reciprocal perks for frequent flyers, and perhaps even coordinate schedules and fares
  • Given that South African Airways doesn’t have any long haul aircraft anymore, and given the general geography of South Africa and Kenya, I would expect that South African Airways might funnel passengers into Kenya Airways’ long haul network, through Nairobi
  • I think we could still see Kenya Airways remain in SkyTeam, and South African Airways remain in Star Alliance, as there’s nothing precluding a partnership while the airlines maintain their own alliances

At the same time, I’m a bit skeptical about all of this:

  • We don’t just have two struggling airlines involved, but we also have two governments involved, which sure could complicate negotiations
  • Kenya Airways hardly has a huge long haul fleet, with just eight Boeing 787s, so it doesn’t seem like the airline can really offer South African Airways passengers “unmatched” global connectivity
Kenya Airways has a small long haul fleet

I’ve long thought that airlines like South African Airways and Kenya Airways would be best off partnering with Ethiopian Airlines or one of the global Gulf carriers for long haul service. The airlines could funnel passengers through those hubs, and truly get one-stop service to anywhere in the globe. The airlines otherwise can’t efficiently compete.

Ethiopian Airlines seems like a better fit for both airlines

Bottom line

Kenya Airways and South African Airways are planning a new alliance, and I’m curious to see how this plays out. Personally I think an outright merger is highly unlikely, but rather that we’ll see cooperation between the two airlines.

I still don’t see this ending particularly well, though, given that neither airline is in a good position, and I’m not sure two struggling airlines are actually better off working together rather than separately, especially with different governments involved.

What do you make of the planned Kenya Airways and South African Airways partnership?

Conversations (18)
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  1. S M Guest

    Seems nobody got out their history books and looked at previous airline alliances with multi-government control/funding. Gulf Air. Alliance Air. Africair. Doesn't work. The governments will want to suck passengers to their hubs and maintain home employment. Everyone will scrap for long-haul vanity routes. The network teams will be arguing the whole way and if they merge it into one with profit-optimisation as a genuine objective then fleet capacity will be sucked South to the...

    Seems nobody got out their history books and looked at previous airline alliances with multi-government control/funding. Gulf Air. Alliance Air. Africair. Doesn't work. The governments will want to suck passengers to their hubs and maintain home employment. Everyone will scrap for long-haul vanity routes. The network teams will be arguing the whole way and if they merge it into one with profit-optimisation as a genuine objective then fleet capacity will be sucked South to the higher GDP, Kenya will complain bitterly. The only benefit will be in reducing the burden on the exchequer by reducing losses on some low-density routes between JNB and NBO, CAI until Egyptair fills the gap, Khartoum, FCO until a European carrier fills the gap and maybe BOM over an NBO hub. The disbenefit will be for consumers on those routes who will see capacity removed. Otherwise plus ça change. In the end each will go their own way. It's two optimists sucking on the same bong.

  2. DO Guest

    I guess that KQ could better intensify the cooperation with KLM and Air France. When looking at geography it is a shame that SkyTeam member Saudia never got to build up a global network. Then again, having flown them numerous times I do see that their planes are OK, but when it comes to staff you always have to wait and see - had numerous red-eye flights where the staff and cabin chief thought that...

    I guess that KQ could better intensify the cooperation with KLM and Air France. When looking at geography it is a shame that SkyTeam member Saudia never got to build up a global network. Then again, having flown them numerous times I do see that their planes are OK, but when it comes to staff you always have to wait and see - had numerous red-eye flights where the staff and cabin chief thought that crew's breaks with chatter and laughs were more important than the sleep of their BC customers.

    Just think that SAA would be the worst option that KQ could choose. SAA just lacks the ambition to improve and survive.

  3. Sean M. Guest

    South African Airways has denied media reports about a potential "merger" with Kenya Airways.

    https://www.news24.com/fin24/companies/industrial/no-its-not-merging-with-kenya-airways-saa-says-following-media-report-20220103

  4. Will Guest

    First, idea is good, successful implementation and details remain unclear as of now. Secondly, the track record of 'successful' airlines e.g. Emirates, Lufthansa (Germany) and so forth are nothing but decades of gov subsidies into the billion USD. So please just because your horizon is limited to only criticise Africans its not valid or even useful. Chinese buy European companies all day long(Eg Mercedes Benz ownership structure) why not Africans if we can't do a...

    First, idea is good, successful implementation and details remain unclear as of now. Secondly, the track record of 'successful' airlines e.g. Emirates, Lufthansa (Germany) and so forth are nothing but decades of gov subsidies into the billion USD. So please just because your horizon is limited to only criticise Africans its not valid or even useful. Chinese buy European companies all day long(Eg Mercedes Benz ownership structure) why not Africans if we can't do a better job (meaning constructive criticism instead of Africa bashing and responsive governments else quit them).
    It's 2022 sick of African haters with no meaningful input while Europeans, Americans, Arabs, and Chinese still keep coming to 'poor' Africa for business and leisure. Learn to international game instead of superficial and harmful arguments. Africa is the future, albeit without these corrupt leaders and corrupted mind puppets of the East and West amidst us here in Africa!

    1. Eskimo Guest

      "while Europeans, Americans, Arabs, and Chinese still keep coming to 'poor' Africa for business and leisure."
      Do you realize these people didn't go to Africa for business and leisure in the way you think. They go there for profit and exploitation. I don't think any Africans hunt rhinos for fun.

      And what is your point of government airline subsidies? They got subsidies, so does KQ and SA. Many successful airlines without subsidies and many...

      "while Europeans, Americans, Arabs, and Chinese still keep coming to 'poor' Africa for business and leisure."
      Do you realize these people didn't go to Africa for business and leisure in the way you think. They go there for profit and exploitation. I don't think any Africans hunt rhinos for fun.

      And what is your point of government airline subsidies? They got subsidies, so does KQ and SA. Many successful airlines without subsidies and many failed with subsidies.

      A lot of readers here do want airlines to succeed, we like to try great products. But ask someone who has local knowledge like @Sean M and what he thinks of this from idea all the way to execution.
      That is your reality check Africa and Will.

  5. Adam Simmons Guest

    A merger or alliance between two weak players rarely makes a strong one in any industry, not just aviation.

  6. John Guest

    It's always been a little crazy that so many African countries seem to start loss making airlines. Based on the recent news about the bailout, it also seems like kQ is bound to shrink somewhat in the near future as well, so I wonder if this means it may abandon a couple of Southern African Routes (Nampula and Ndola for example, but really any unprofitable route in SA's backyarad) in favor of letting SAA serve these smaller destinations for them.

  7. askmrlee Guest

    “unmatched” global connectivity = a SkyTeam partner and a Star Alliance partner being partners.

  8. shoeguy Guest

    Kind of pointless, unless they are planning some sort of pan-African global airline. They are both basket case companies.

  9. View Guest

    Sounds like an awful idea to be honest, combine two struggling airlines with history of corruption issues. What can possibly go wrong?

  10. WHS Guest

    SAA indeed still has long haul aircraft. I flew their A330 a few weeks ago. Registration ZS-SXM.

    1. askmrlee Guest

      Yeah, I think the caption meant to say SAA no longer has THIS type of long haul aircraft - the A340.

    2. WHS Guest

      The article says "Given that South African Airways doesn’t have any long haul aircraft anymore" which is not correct.

    3. WHS Guest

      The article says "Given that South African Airways doesn’t have any long haul aircraft anymore" which is not correct. They have 1 A330-300 in the fleet which currently flies to ACC, LOS, and occasionally to CPT.

  11. VITOR SILVA Guest

    What about Star Alliance?

  12. Eskimo Guest

    Unmatched continental reach and global coverage?
    I'm pretty sure Global Ghana and Goldstar Air (maybe BALTIA) would say hold my beer.

    They're going to eventually sell out to Chinese investors.
    China Eastern Kenya Airways.
    South African Hainan Airways.

    1. SQ51 Guest

      Consolidate into one carrier wholly owned by CCP, call it China Western

  13. Dave Guest

    Clearly a game changer.

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Sean M. Guest

South African Airways has denied media reports about a potential "merger" with Kenya Airways. https://www.news24.com/fin24/companies/industrial/no-its-not-merging-with-kenya-airways-saa-says-following-media-report-20220103

1
John Guest

It's always been a little crazy that so many African countries seem to start loss making airlines. Based on the recent news about the bailout, it also seems like kQ is bound to shrink somewhat in the near future as well, so I wonder if this means it may abandon a couple of Southern African Routes (Nampula and Ndola for example, but really any unprofitable route in SA's backyarad) in favor of letting SAA serve these smaller destinations for them.

1
View Guest

Sounds like an awful idea to be honest, combine two struggling airlines with history of corruption issues. What can possibly go wrong?

1
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