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Kenya Airways (KQ) and Precision Air are seeking an extension of a special waiver granted two years ago, allowing them to collaborate and share revenues on routes covered by a joint venture agreement.
The Competition Authority of Kenya (CAK), in its latest report covering the financial year ending June 2023, disclosed that it is currently reviewing the application.
CAK stated, “The airlines have requested exemptions for coordination on various aspects of their services, including reciprocal code-sharing, alignment and coordination of management activities, and pricing of ticket fares.”
Back in 2018, both airlines, although competitors, sought an exemption from CAK to facilitate their joint venture, as it involved sharing sensitive information that contradicted provisions outlined in section 21(3) of the Competition Act. This exemption allowed them to engage in reciprocal code-sharing on routes operated by both carriers.
The agreement also permits the two airlines to synchronize their network operations, harmonize fares on the joint venture routes, manage revenue on these routes jointly, and coordinate marketing and sales efforts.
Kenya Airways serves over 42 destinations worldwide, while Precision Air offers scheduled and chartered air passenger and cargo transportation services, including domestic flights within Tanzania and regional flights to Nairobi and Moroni.
CAK noted that both airlines had previously approached the authority seeking guidance on whether they could extend the exemption granted under the joint venture agreement beyond its expiration.
