Kenya Airways is set to fast-tracking negotiations to launch common initiatives with South African Airways (SAA) in a pact which the two airlines signed last year to establish an African airline by 2023.
Michael Joseph , Chairman Kenya Airways ,said while the pact is a long-term agreement, both airlines are in talks to jointly expedite the implementation of common business plans to gain a competitive edge over rivals. He also added that both airlines were taking some initiatives to make the agreement sooner.
The two carriers signed a Strategic Partnership Framework in South Africa last November, in a move that will see the two carriers eventually form a Pan-African carrier amid common longstanding financial woes exacerbated by the Covid-19 pandemic.
It is expected that the partnership will improve the financial viability of the two airlines. Customers will also benefit from more competitive price offerings for both passenger and cargo segments.
Kenya Airways has been recording losses for the past 4 consecutive years being hard hit by the Coronavirus pandemic that saw most countries ban travel. As a result, the national courier is expected to receive a Ksh 149.6 billion bailout from the government.
Treasury Secretary Ukur Yatani said earlier the government will take over Sh93.4 billion of national carrier Kenya Airways’ debt owed to multiple suppliers.
The treasury is also expected to give the airline Ksh 53.4 billion in direct budget support in the fiscal year that ends in June 2022 as well as the subsequent one, making it the largest corporate bailout.
The bailout comes as the State dropped the favoured long-term solution for the ailing Kenya Airways that was anchored in the nationalisation of the airline—which was approved by lawmakers in July 2019 and would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE).
KQ says the long recovery prospects and diminishing revenue in an environment of increased costs due to tight health and safety measures mean it will require a bailout to stay afloat.
The persistent underperformance of the airline has led to huge losses and loss of market share to rival firms.
