- aims to take on Ethiopian airlines
South African Airways, Kenya Airways Plc, Air Mauritius Ltd. and RwandAir are in talks to create an alliance, as they face mounting competition.
Reports say they want to break the stranglehold of Ethiopian Airlines on the continent and boost their fortunes through innovative ways.
“Air Mauritius took the initiative to join forces with three other African airlines in a bid to create an alliance that would develop air connectivity in the region,” Chief Executive Officer, Somas Appavou, told Bloomberg.
“In a highly competitive environment,” he said, “this alliance would allow the potential partners to create a consolidated network using the individual strength of each airline to offer passenger better choice and flexibility.”
The talks come at a time when Kenya Airways is going through a restructuring after reporting loses for three consecutive years.
In November 2017, the Kenyan government and lenders agreed to convert $405.3 million owed by the carrier into equity, giving the state a controlling stake and diluting other shareholders, including Air France-KLM.
Last month, Air Mauritius reported a first-half loss of 20.2 million USD.
South African Airways received an unsolicited 1.4 billion USD loan offer in return for a 51 percent stake in the cash-strapped state-owned carrier, City Press reported Dec. 23.
RwandAir, on the other hand, is prioritizing adding new routes including five days a week direct Kigali-Addis Abeba flights starting from April next year.
The state-owned airlines is also overhauling its existing fleet over short-term profitability as it focuses on supporting the country’s growing tourism industry.
The four airlines have been discussing the alliance for over 15 months, and are currently putting final touches onto the deal, reported Nairobi-based The East African newspaper.
They expect the arrangement will help them cut back on costs, improve synergy between hubs and expand code-sharing on several routes, making them more competitive than the continent’s top carrier, Ethiopian Airlines and foreign carriers making inroads into the continent.
“As an alliance, the partner airlines would also benefit from synergies in areas like maintenance, knowledge sharing and training while they will also have an edge in procurement activities,” Air Mauritius’ Appavou said. (Daily Monitor)