Consolidating Big Three Airlines to form African Airlines

Abstract

The Open Skies agreements and liberalization of the airline industry allowed global airlines to compete over routes, and markets. Globalization uncovered African air markets to be grasped by well-positioned and solidly founded airlines globally. To protects disenfranchise African airlines in their misappropriated airspace, there are need for African government to establish efficient, profitable and cost effective airlines in the continental to compete against foreign carriers that have established dynamic present in African then the biggest airlines in Africa. The purpose of this research is to explore ways and strategy, which African carriers could use to transform their network and equipment from old Soviet Union obsolete and dilapidated aircraft to newer aircraft that are more efficient, cost effective, safe, and fitted with up to date entertainment system and world-class lie flat and comfort economy seats. The purpose of this research is to explore, compare and contrast the generated data to determine whether consolidating South Africa Airways, Kenyan Airways and Ethiopian Airways would be possible given existing political barriers, lack of liberalization and Sine Qua non infrastructures. The main objective of the research project would be to find a tactful and feasible business modal, and strategy to revive economies of Africa and strengthened air transportation industry in these predefined geographical regions. The study revealed that consolidation of Kenya Airways, South Africa Airways and Ethiopian Airways is a viable option, if consolidation of Kenya Airways, South Africa Airways and Ethiopian Airways takes place, because the performance of companies at individual level in terms of average weekly flights, market share and number of routes is good, which can help these companies in making high profits.

Abstract2

3

Introduction4

Objective5

Scope5

Methodology6

Qualitative Analysis14

Quantitative Analysis17

Conclusion34

Introduction

There are many airlines in different parts of the world that suffer a crisis from one point to the other. Though, they also have some steady operations in between. In most of the cases, the airlines try to survive a crisis by looking up for alternative governments in order to protect themselves from the external competition. The main focus of the airlines is to seek an increase in the market share and to look out for the financial bailout to continue running their operations at an optimal level. Even in the western countries, the governments make serious efforts in order to arrange support for the ailing operations. The Government tries to support and protect creditors by ensuring that the capital remains available to the airlines in bad and good times. As the liberalization has grown and there is an easier market access, the pressure has increased on the African airlines to rethink about their business model.

Due to the increase in the liberalization and a much better market access, the pressure has increased on the airlines to reconsider their business strategy in order to have much better reliable sources for earning revenues and incurring costs. For this step, the company does not need much of support from the external sources. In Africa, the air transport market has shown promising signs as compare to ...