Pan-African airline group solution to regional aviation challenges

Kenya Airways’ 2024 results are remarkable in two ways. The first is that Kenya’s national carrier has turned a net profit for the first time in more than a decade. At Sh5.4 billion, it is an improvement over the previous year’s results by 124 per cent.

The second is that they are polar opposites of both Tanzania and Uganda’s national carriers. A report published in The East African says, “Air Tanzania’s losses have mounted, defying nearly a decade of continued effort to rescue the national carrier. Tanzania’s Auditor General says the carrier’s losses rose by 62 per cent to reach Tsh91.8 billion (USD 34.4 million).”

Uganda Airlines has fared slightly better, reporting a net loss of Sh237 billion in 2024.  According to Chimpreports, this was “a slight improvement from the Sh 324.94 billion loss recorded in 2023.” The report further quotes the Ugandan Auditor General saying, “the airline faces persistent financial and operational challenges, raising concerns over its sustainability and shareholder value.”

At first blush, both Tanzania and Uganda’s airlines seem to be following in KQ’s previous loss-making trajectory. But closer examination reveals them to be victims of the continent’s fragmented and inefficient aviation sector. For a continent that commands less than 3 per cent of global air traffic, Africa domiciles more than 17 per cent of the world’s commercial airlines. With 196 commercial airlines on the continent, Africa surpasses North America, the Middle East and Latin America.

Kenya Airways Group Managing Director and CEO Allan Kilavuka proposes a consolidation of the continent’s aviation assets starting with its airlines. Kilavuka calls for a pan African airline group. He decries the fact that, “all other continents and subcontinents have gone through this consolidation process. Africa, on the other hand, is fragmenting further.”

A New York Times article mentions that “the problems facing individual countries require a continental response. Effective policies can be orchestrated only on a supranational level.” This has been demonstrated in ASEAN countries where several major airlines operate across multiple member countries and are considered regional players. Examples of these include AirAsia and Scoot. The European Union also has an open skies policy with member countries allowed to operate their airlines unencumbered by tariff and frequency restrictions.

Air Tanzania and Air Uganda, working together with Kenya Airways and South African Airways (SAA), could benefit from a consolidation of their operations. KQ and SAA have been in talks over the years for the formation of a pan African airline group. The smart play would be for other airlines to join in such a venture for utilisation of capacity and economies of scale benefits

Last year, Tanzania sought fifth freedom rights from Kenya for its air freighters to uplift cargo from Nairobi. This is because Kenya has a surfeit of export cargo that Kenya Airways is unable to uplift alone. Both Uganda and Tanzania have cited maintenance costs as a challenge to profitability yet KQ operates a Maintenance, Repairs and Overhauls (MRO) workshop that recently received certification from the European Union.

Still, KQ’s MRO needs to scale up so that it takes on more advanced repairs like engine and landing gear workshops. This can only be achieved through a pan-African airline group.

Mr Khafafa is a public policy analyst