South African Airways (SA, Johannesburg O.R. Tambo) has pulled out of a planned pan-African airline alliance with Kenya Airways (KQ, Nairobi Jomo Kenyatta), which continues to scout for suitable airline partners in the south and west of the continent, according to group CEO Allan Kilavuka.

"We are looking for one or two airlines that will join in this venture, then we start this journey together. It is going to be progressive and likely to take long," Kilavuka said in an interview with The Africa Report published on September 2.

He said that SAA formally withdrew in early 2025 just as the two state-owned carriers approached the final stage before formalising the venture, which had been expected to evolve into a merger from 2026. However, other bilateral agreements, including code-sharing, remain in place.

This is the first on-the-record confirmation from Kilavuka that the alliance with SAA had fallen through, after he confirmed this to ch-aviation, confidentially, on the sidelines of IATA's 81st annual general meeting in India in June, saying there was no longer any appetite from the current SAA management for the venture.

SAA has declined to comment.

Strengths of two airlines

In 2021, the anchoring partners signed a memorandum of cooperation, followed by a strategic partnership framework, aimed at forming the pan-African airline group that would consolidate Africa's fragmented airline industry for enhanced passenger traffic, cargo opportunities, and overall trade across the continent.

Kilavuka's brainchild, the initiative sought to leverage the strengths of both airlines' hubs at Nairobi Jomo Kenyatta and Johannesburg O.R. Tambo, respectively, through a coordinated network, codesharing, combined pricing, and cost reductions via bulk procurement and shared ground handling services. The thought was that together, the African airlines would be better positioned to compete with regional leader Ethiopian Airlines and the Gulf carriers.

The initial target date was late 2023, subject to various business and regulatory conditions, and the partnership was at first positioned as a commercial alliance, not a merger, focusing on collaboration rather than combining the airlines into a single entity. Still, the aim was to establish the structure of a new holding company by the end of 2023, modelled on IAG International Airlines Group. However, implementation was delayed due to internal restructuring at both airlines, SAA's failed privatisation deal with the Takatso Aviation Consortium, plus regulatory and competition concerns.

The search continues

Kenya Airways is now targeting airlines in Southern and West Africa, Kilavuka said, stressing that profitability is not required upfront if there is a strategic fit. "The reason we are doing this joint venture is to make airlines profitable," he said, conceding that finding a suitable partner "is going to be difficult, but we will continue pursuing this case."

Aviation analyst and consultant Sylvain Bosc noted that the pool of viable partners in Africa is small. Ethiopian Airlines has already locked in stakes across the continent with the likes of ASKY Airlines in Togo, Zambia Airways, and Malawi Airlines. Ethiopian is also exploring opportunities in South Sudan. "While some African airlines are open to partnerships, I don’t see any that could deliver sufficient value to KQ," said Bosc, chief executive of Avico Group.

Kenya Airways and Air Tanzania recently signed a strategic memorandum of understanding (MoU) to enhance cooperation and improve air connectivity across East and Southern Africa. Earlier this year, Kilavuka said Kenya Airways was exploring a partnership with SAA Technical (SAAT), the maintenance arm of SAA.