South African Airways Pulls Out of Pan-African Airline Group

South African Airways (SAA) has withdrawn from a proposed Pan-African Airline Group that sought to merge national carriers across the continent into a single, consolidated entity aimed at enhancing competitiveness and profitability through shared resources and wider network coverage.

The initiative, which was jointly spearheaded by Kenya Airways and SAA, was envisioned as a long-term solution to the chronic challenges faced by African airlines, including limited route networks, high operational costs, and fragmented markets.

Under the plan, the two flag carriers were to serve as anchor partners in the new group, pooling their assets and expertise before inviting other African airlines to join the alliance.

“The dream of having a Pan-African airline is still alive,”  Allan Kilavuka, chief  executive officer at Kenya Airways told Business Day Africa

“South African Airways has said that they are not ready at this moment to proceed, which is fine. But we are now opening up discussions with other carriers in Southern, West, and East Africa.”

The withdrawal is seen as a setback to an ambitious effort to create a continent-wide airline group capable of competing with global carriers and reaping economies of scale.

Plans to establish the alliance had moved to an advanced stage but it was slowed by the pulling out of an investor who was to acquire a substantive stake at the Johannesburg based carrier.

Industry experts say most African airlines remain under-capitalised and over-regulated, operating in isolation due to restrictive bilateral air service agreements and lack of coordination.

The Pan-African Airline Group was first proposed in 2021 amid growing calls for greater integration of Africa’s aviation industry.

The initiative gained momentum following the pandemic-induced turbulence that exposed the fragility of the continent’s air transport sector.

The consolidation was expected to improve route connectivity, reduce duplication, and unlock greater value for shareholders and passengers alike.

Kenya Airways, which continues to back the project, said it will seek new partners who are “more ready” to move into the consolidation phase.

The carrier remains optimistic that the formation of a unified African airline is still achievable despite the latest setback.

Efforts to create regional champions mirror trends in Europe and the Middle East, where large airline groups have outperformed smaller rivals by integrating operations and leveraging joint purchasing power.

African airlines account for less than three percent of global air traffic, despite the continent being home to over 1.4 billion people.

gandae@businessdayafrica.org