Kenya Airways (KQ, Nairobi Jomo Kenyatta) has sought approval from the Competition Authority of Kenya (CAK) to amend its joint venture agreement with Tanzania's Precision Air (PW, Dar es Salaam), according to a Kenyan government gazette. The Kenyan carrier, which owns a 41.23% stake in Precision Air, is applying to be exempted from anti-competition regulations which prevent collusion on pricing.
In the gazette notice, the airlines signal their intention to align and coordinate routes, schedules, capacity, designation and ticket pricing on joint venture routes. They also intend to participate in joint marketing, sales and reciprocal code sharing.
Both Kenya Airways and Precision Air have struggled with profitability over the past several years. The Kenyan carrier has suffered four straight years of losses, with last year's loss totalling KES26.2 billion (USD253 million). Precision has fared no better, recording a TZS91.67 billion (USD41.57 million) loss for the financial year ending March 31, 2016.
The two airlines currently codeshare on flights between the two countries, with Kenya Airways operating the following routes: Nairobi Jomo Kenyatta to Dar es Salaam, Kilimanjaro and Zanzibar, and Kilimanjaro to Dar es Salaam and Zanzibar. For its part, Precision operates the Nairobi Jomo Kenyatta to Dar es Salaam, Kilimanjaro, Mwanza & Zanzibar, Dar es Salaam - Zanzibar, and Kilimanjaro - Mwanza routes.
The antitrust application is subject to a 30-day comment period.
