Kenya Airways, South African Airways joint venture faces regulatory headwinds

The partnership between Kenya Airways and South African Airways, which want to form a pan-African airline, will be treated as a merger on the back of the effect that the joint venture will have on competition in the region, the COMESA Competition Commission (CCC) has said.

Kenya’s flag carrier operates in countries that are members of the Common Market for Eastern and Southern Africa (COMESA) and is bound by the regional watchdog’s treaty and will be forced to notify CCC of an impending merger. The two carriers have many times denied that they are merging, terming their deal a partnership by using their existing assets. But the CCC’s CEO Willard Mwemba said that “what we worry about is not the term they use or the form but the effects that the coming together of the two will have in the market.”

Kenya Airways CEO Allan Kilavuka has said that regulatory requirements by competition bodies may hinder the process. “We wanted to see if we can share assets and other resources, but the authorities need to immunize us so that we can overcome hurdles that may come up in regards to antitrust and anti-competition requirements,” Kilavuka said in June 2022. But Mwemba said by virtue of the fact that Kenya Airways operates in the common market, they will need to inform them of a potential matter despite the form that the transaction may take.

Kenya Airways and South African Airways signed a Strategic Partnership Framework in November 2021, forming a key milestone towards co-starting a pan-African airline by this year. The talks were initiated by former President Uhuru Kenyatta and his South African counterpart Cyril Ramaphosa. The Strategic Partnership Framework will see both airlines work together to increase passenger traffic, cargo opportunities, and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.