Four African airlines are reportedly planning to launch the first African Civil Aviation Alliance early next year. The move is expected to break the monopoly of Ethiopian Airlines in the continent and boost their earnings through innovative ways.
The African airlines namely Air Mauritius, South African Airways, RwandAir, and Kenya Airways are hoping that the alliance will help them to achieve the required economies of scale which would yield in improved efficiency and collaborations, reported The East African.
The continent’s aviation sector is currently plagued by a number of challenges in the form of high taxes, airfare, jet fuel costs, poor airport infrastructure, international competition, and inward-looking aviation policies. The issues have forced three of the four (except Air Mauritius) to go into a loss-making territory for more than four years in a row.
The African Civil Aviation Alliance arrangement is expected to aid the four airlines by cutting back on costs, improving synergy between hubs and expand code-sharing on several routes. Furthermore, it is also expected to make the airlines more competitive than the continent’s top carrier, Ethiopian Airlines and foreign carriers reigning in the continent.
The alliance, which has been in the works for over 15 months, is currently going through final touches. The discussions are currently going on regarding how this alliance will work on a range of city pairs, route codeshares, and joint use of lounges, maintenance and repair centers, and the coordination of their frequent flyer programmes. The alliance is expected to be formally announced before the New Year and come into shape before March next year.
“The drive for this alliance is partly pushed by the need to have the four airlines operate hub-and-spoke networks as they seek to enhance the demand for their respective networks, and increase their market power, especially at their hub airports,” a source with knowledge of the alliance said.