How much of what African politicians commit to is ever done? Not much, it would seem, if experience is our guide.

For the purposes of this article, we will confine ourselves to aviation. In October 1998, African Transport Ministers signed the Yamoussoukrou Declaration, an important agreement to promote deregulation of the African air space. Two years later, that agreement – then known as the Yamoussoukrou Decision – was adopted by Heads of State during a meeting of the Organisation of African Unity, and was meant to take effect exactly two years later, on 12 August 2002.

Although it was ratified by many countries, the Yamoussoukro Decision was mainly observed in breach. In January 2018, the African Union established the Single African Air Transport Market (SAATS) to create an open-skies dispensation similar to that which exists in the European Union. The aim was to implement provisions of the 18-year-old Yamoussoukrou Decision. As of 2019, 23 countries had signed the SAATS agreement.

In the interim, major regional airlines like SAA here at home and Kenya Airways (KQ) in East Africa recorded massive losses. SAA has made losses since 2012, while KQ  has been making losses since 2013. SAA’s last profit was R782 million in the 2010/11 financial year, while KQ’s was 7,8 billion Kenyan Shillings (KSh) in 2013, after more than a decade of profitability following its privatisation and listing on the Nairobi Securities Exchange (NSE). This followed the implementation of an ambitious growth strategy called Project Mawingu (Project Clouds). In 2016, the airline lost KSh26,2 billion, which was then considered the worst-ever corporate loss in East Africa. However, the worst was yet to come: in 2020 it lost KSh36,2 billion (US$335,8 million).

Although the Kenyan Parliament voted to nationalize KQ in June 2019, undertaking that the process would have been completed within six months, it was not until June 2020 that the National Aviation Management Bill was tabled. While the hope was that it would have been finalised by October that year, more than a year later it remains unfinalized, and trade in KQ’s shares on the NSE has been suspended since April 2021. In June, KQ could not pay salaries on time, but did so a month later – after it had already cut employees’ salaries by between 5% and 30% in January for six to 12 months.

Meanwhile, SAA was placed in business rescue in December 2019, and only emerged from it in April this year, but commenced operations in September, following news that it would be privatised. However, due diligence by the approved suitor, the Takatso consortium – which is expected to own 51% of the carrier and invest about R3 billion – continues, apparently indefinitely. Among the things which remain to be sorted out is legislation which limits possible ownership of SAA by foreigners to 20% and by South Africans to 49%.

However, even as KQ and SAA were struggling, Ethiopian Airlines (EAL) was growing from strength to strength. Not only has EAL been consistently profitable since it was established in 1946, but it has since bought or partnered with other airlines across the continent and now benchmarks itself against international competitors like Lufthansa and Singapore Airlines. It was one of only three airlines in the world to make a profit in the year ending in June 2021, thanks to “agility, quick decision-making and resilience”, according to CEO Tewolde GebreMariam, who has now been in the job for more than a decade.

Meanwhile, SAA has had at least 12 CEOs during that period, and Kenya KQ has had four CEOs.

Given this background, it was very surprising, therefore, to learn that, during Kenyan President Uhuru Kenyatta’s State Visit to South Africa last week, SAA and KQ signed “a Strategic Partnership Framework Agreement” to form a pan-African airline group by 2023. The airlines announced that they would work together to increase passenger traffic, cargo opportunities and general trade in the two countries and the rest of the continent. Media reports said they “expected that the partnership will improve the financial viability of the two airlines, while at the same time offering competitive prices for both the passenger and cargo segments”.

Coming after the signing of a Memorandum of Cooperation between the two airlines in September 2021, the agreement was said to be consistent with the African Continental Free Trade Area (another African agreement which so far appears to be stillborn), according to the Chairpersons of SAA and KQ, John Lamola and Michael Joseph respectively.

This agreement enjoys the support and blessings of Kenyatta and Ramaphosa, who announced a series of other important agreements to increase trade and the ease of travel between the two countries. Speaking at a press conference with his Kenyan counterpart, Ramaphosa remarked: “The decision of our respective national airlines to deepen their collaboration is further testament to the growing ties between our countries.”

In principle, this mutual cooperation between SAA and KQ makes sense. However, a few questions immediately come to mind. Which SAA has entered into this agreement – is it the SAA currently fully owned by the State, or is it the to-be-privatised SAA which will have Takatso as the majority shareholder? Does the agreement enjoy the support of Takatso?

More importantly, however, how can two airlines which have struggled so badly over almost the past decade be in a position to form a pan-African airline group? Shouldn’t their immediate focus be survival, before they can begin to dream big? After all, SAA has survived on Government bailouts since 2013, and the heavily-indebted KQ can hardly service its debts and is paying only the interest. KQ has been battling with the implementation of its turnaround strategy, “Operation Pride”, which was adopted in 2015, and has now engaged the services of London-based Steer Group to review it.

How, then, can KQ – a heavily-indebted, privately-owned airline in which the Kenyan government is now the largest shareholder, and which is on the verge of nationalisation – and a hobbling SAA whose future is uncertain commit to such ambitious projects as the formation of a pan-African airline group? Could this strategic route be one which has been seriously considered by the Boards of the two airlines, or is it yet another product of political dreams by the two governments?

The fact remains that EAL, which is by far the most successful African airline, has long offered to partner with SAA and to assist KQ wherever possible. Both SAA and KQ pilots have been trained at the Ethiopian Aviation Academy, which is owned by the Ethiopian Aviation Group which houses EAL. In October last year, EAL entered into a short operational joint venture with SAA, which saw it offering operational assistance (which involved “pilots, maintenance and aircraft”) to the South African national carrier.

The truth is that EAL is already that “pan-African airline group” envisaged by SAA and KQ. The Ethiopian carrier has a presence throughout the continent, where it has equity in different airlines and offers operational and management services. Closer home, it already owns Mozambique’s LAM (99%) and has significant equity in Zambia Airways (45%) and Malawi Airlines (49%). In West Africa, it owns 40% of AfricanSky Airline and 49% in Guinea Airlines, and in Central Africa it owns the same percentage (49%) in Chad Airlines.

According to EAL Deputy Chairman Dr Arkebe Oqubay, EAL was one of the suitors of SAA, but backed off when it realised, following a preliminary due diligence, that “it is far too late” because of the extent of SAA’s challenges. When asked to manage SAA, EAL again declined for at least three reasons: “rampant Government interference, the unions’ radicalism and the airline’s corporate governance failures”.

It seems reasonable to conclude, therefore, that not much will come of the SAA-KQ agreement to form a pan-African airline group, among other things.

Dr Nyatsumba is a turnaround strategy expert, the author of Successfully Implementing Turnaround Strategies in State-Owned Companies: SAA, Kenya Airways and Ethiopian Airlines as Case Studies and the Managing Director of KMN Consulting.