OPINION | Airline tie-up for Kenya and SA: possible rewards, possible risks | Fin24

2022-01-18 07:01:00 PM

OPINION | Airline tie-up for Kenya and SA: possible rewards, possible risks

OPINION | Airline tie-up for Kenya and SA: possible rewards, possible risks

In November, SAA and Kenya Airways formalised their plan to set up a pan-African airline in 2023. But several factors could stymie the proposed alliance, says Eric Tchouamou Njoya.

, formalising their plan to set up a pan-African airline in 2023.on Air Afrique’s failure found that the airline was doomed by conflicting national objectives and some of the 11 participating countries were unhappy with what they called a subordinate role.

academic studiesexperiencedApart from these benefits, an alliance between South African Airways and Kenya Airways would be good for a number of reasons specific to Africa.a full return to 2019 air traffic levels in late 2023.that air transport will grow on average by 3.2% over the next decades in Africa and by 4.8% if African States implement the Single African Air Transport Market.

Read more: Fin24 »

Crime in SA | Zim nationals caught with blasting cartridges, explosives

Police found 11 blasting cartridges and 25 capped fuses hidden under a jacket. Read more >>

I never thought of meeting a legit bitcoin trader after been scammed many times at my age but the heavens sent Michael90078 guided me and help me make a living through bitcoin with my cash app, I recommend you to meet her now and also be a beneficiary of good work

Airline tie-up for Kenya and South Africa: possible rewards, and risks.flysaa and KenyaAirways have drawn up plans to set up a joint pan-African airline in 2023. Moneyweb Aviation flysaa KenyaAirways This will only work if both airlines are fully privatised. Otherwise it will be used to exclude other airlines, particularly non-African ones from flying in an into Africa, to the economic detriment of the continent.

Airline tie-up for Kenya and South Africa: possible rewards, and risks.flysaa and KenyaAirways have drawn up plans to set up a joint pan-African airline in 2023. Moneyweb Aviation flysaa KenyaAirways This will only work if both airlines are fully privatised. Otherwise it will be used to exclude other airlines, particularly non-African ones from flying in an into Africa, to the economic detriment of the continent.

OPINION | Financial literacy is an essential life skill, but SA ranks among the world's worst | Fin24A sobering study by the Organisation for Economic Co-operation and Development ranked South Africa as the worst of 30 countries for financial competency, says Vuyo Lee.

Electric taxis to be trialled in South AfricaSA Taxi owner, Transaction Capital, plans to trial electric taxis in South Africa as part of a possible long-term shift to cleaner energies.

MONEY LIVE | Strong increase in SA's PGM production in November | Fin24MONEY LIVE | Strong increase in SA's PGM production in November - Thank you for the great review that we had the other day. You made it easier for me to understand crypto MichaelWeldon_ $43k earned🙌 Thank you for the great review that we had the other day. You made it easier for me to understand crypto MichaelWeldon_ $43k earned🙌

Malawi president offers his team big Africa Cup of Nations win bonusThe president of Malawi has reportedly promised his national team a big financial reward if they get a 'desired result' in their Africa Cup of Nations tie against Senegal this evening. 💵 Read more here! ➡ I just earned R50,000 trading with Tatiana_Fx_ its unbelievable I know that but it's true and I promised that I would share the good news to everyone I can if it worked for me and that's exactly what am doing now. Give it a try as well Tatiana_Fx_ She's by far the best.. So they want them to commit suicide! And they were robbed

of $333 million for the 2020 financial year.Africa has 357 airlines, the top 10 of which carried more than 60% of traffic.Africa has 357 airlines, the top 10 of which carried more than 60% of traffic.Vuyo Lee (supplied) Supplied A sobering study by the Organisation for Economic Co-operation and Development ranked South Africa as the worst of 30 countries for financial competency.

In November, the two national airlines signed a Strategic Partnership Framework , formalising their plan to set up a pan-African airline in 2023. In my view, the partnership will only succeed if certain conditions are met. Between them the airlines carried 95 million passengers in 2019, according to Routes, an online source of information on route announcements. The two most important ones are that, firstly, there must be strong national and political agreement and will. Firstly, the industry has to contend with huge disparities in economic and air transport development. But, secondly, that the tie-up must be driven by the private sector. There is also an uneven distribution of international air passenger traffic across regions and within countries. My recent on Air Afrique’s failure found that the airline was doomed by conflicting national objectives and some of the 11 participating countries were unhappy with what they called a subordinate role.

The case for a partnership A range of academic studies show that alliances affect the production costs of participating airlines through economies of scale (by means of joint operations of air and ground services), increased traffic density (through network expansion and additional traffic feed) and scope (through increased reach and efficient connections). Other challenges include high costs of operation, market protectionism as well as safety and security concerns. Other challenges include high costs of operation, market protectionism as well as safety and security concerns. Joint ventures, have been, and will continue to be, the key in the future development of airline business. Air France and KLM are good examples why airlines are better off working together. In 2020, only the Ethiopian Airlines made a profit in the continent. Both have experienced significant growth since getting together in 2004. And with financial woes compounded by COVID-19, it is likely many more airlines will go under. Some of alliance arrangements may lead to a reduction in costs and increased efficiency. Two of the continent’s biggest carriers – South African Airways and Kenya Airways – are under financial stress.

But they do not necessarily lead to a reduction in competition in the market. Apart from these benefits, an alliance between South African Airways and Kenya Airways would be good for a number of reasons specific to Africa. South African Airways came close to being wound up, but for its part Kenyan Airways reported losses of $333 million for the 2020 financial year. South African Airways came close to being wound up, but for its part Kenyan Airways reported losses of $333 million for the 2020 financial year. Firstly, it would help them overcome some of the existing market challenges, such as market access restrictions, increased competitions from major non-African airlines such as Turkish Airlines, Emirates and Europeans carriers. Secondly, the alliance could take advantage of a return to pre-COVID travel levels. In my view the partnership will only succeed if certain conditions are met. The International Air Transport Association a full return to 2019 air traffic levels in late 2023. The two most important ones are that, firstly, there must be strong national and political agreement and will.

And it’s estimated that air transport will grow on average by 3. But, secondly that the tie-up must be driven by the private sector.2% over the next decades in Africa and by 4.8% if African States implement the Single African Air Transport Market. The case for a partnership A range of academic studies show that alliances affect the production costs of participating airlines through economies of scale (by means of joint operations of air and ground services), increased traffic density (through network expansion and additional traffic feed) and scope (through increased reach and efficient connections). The case for a partnership A range of academic studies show that alliances affect the production costs of participating airlines through economies of scale (by means of joint operations of air and ground services), increased traffic density (through network expansion and additional traffic feed) and scope (through increased reach and efficient connections). Thirdly, it would enable them to create and encourage a market services specialisation among airline operators. Airlines may specialise on feeder services and fly destinations with smaller demand and catchment areas. Air France and KLM are good examples why airlines are better off working together.

An example of this type of specialisation include the interlining agreement between Ethiopian and Airlink. Both have experienced significant growth since getting together in 2004. In my view, the cooperation deal would also improve the financial viability of the two national airlines. Some of alliance arrangements may lead to a reduction in costs and increased efficiency. They could pool maintenance services and reduce costs by pooling purchases, sales and financial transactions. It would boost customer volumes if cost savings were passed on to customers by means of lower fares. Apart from these benefits, an alliance between South African Airways and Kenya Airways would be good for a number of reasons specific to Africa. Apart from these benefits, an alliance between South African Airways and Kenya Airways would be good for a number of reasons specific to Africa. Introducing services in the South African market would be a great addition for Kenya Airways and vice versa.

With their , (a hub is a central airport that flights are routed through), cooperation will help to boost the route networks of both airlines across Africa. Secondly, the alliance could take advantage of a return to pre-COVID travel levels.  Why alliances fail . The International Air Transport Association anticipates a full return to 2019 air traffic levels in late 2023.