Kenya, Rwanda, South Africa and Mauritius national carriers mull alliance

Kenya Airways, RwandAir, South African Airways and Air Mauritius are in talks to form an alliance to bolster their competitiveness in the air travel industry.

The move comes as the Kenyan, South African and Mauritian national carriers face financial and operational challenges that have affected their profitability.

“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 said on Wednesday.

“In a highly competitive environment, this alliance would allow the potential partners to create a consolidated network using the individual strength of each airline to offer passengers better choice and flexibility.”

Kenya Airways is on a restructuring phase following losses in three consecutive years. The Kenyan government and lenders agreed in November 2017 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 17.7 million euros ($20.2 million).

South African Airways on the other hand reportedly received an unsolicited $1.4 billion loan offer in return for a 51% stake in the cash-strapped state-owned carrier.

RwandAir is, however, prioritising adding new routes and overhauling its existing fleet over short-term profitability as the state-owned airline focuses on supporting the country’s growing tourism industry.

“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,” Appavou said in response to questions.