KQ, South Africa Airways to co-operate under Holding Company

Kenya Airways (KQ) and South Africa Airways (SAA) are set to merge operations under a Holding Company.

The management of the national carrier has made further disclosures on the strategic partnership between the pair which was announced first in November 2021.

“We are looking at a Group organisation sitting at the top of various anchor companies and then the two airlines will continue to fly as separate tails but they will synchronize their networks and schedules while synergizing common costs within the Group,” stated Kenya Airways CEO Allan Kilavuka.

The two flag carriers target to commence joint operations from next year with the partnership seeking to reduce the unit of flying while providing multiple options to passengers.

The partnership under the holding company borrows a leaf from Europe where carriers such as British Airways have collaborated under corporations such as the AIG Group.

A holding company describes a limited liability entity holding a controlling stake in other companies but does not involve itself in the manufacture of goods or services.

“The shareholders of the holding company would be strategic investors and individual governments. The holding company would provide services to airlines operating underneath such as training, HR, catering, maintenance and finance,” added KQ Chairman Michael Joseph.

For both KQ and SAA, the partnership is seen as a life-saver for the pair who are both locked in financial turmoil after losses driven primarily by heavy operating costs.

According to Michael Joseph, the partnership is replicable across the continent as a measure to grow Africa’s nascent aviation industry.

Over the long-term, KQ is hoping to add a carrier from West Africa to create a tripartite coalition.

“Its not just going to be KQ and SAA, the intention is also at some point in the future to invite a West African airline so we could have a three-hub strategy covering Nairobi, Johannesburg and a new West Africa hub to create more opportunities for our airlines and passengers,” added Mr. Joseph.

This week, KQ disclosed a narrowed loss of Ksh.15.9 billion in 12 months of operations to December 2021.