SAA-AIR Mauritius to form a joint venture

The Competition Commission (CompCom) has granted an exemption to South African Airways (SAA) and Air Mauritius to form a joint venture (JV) on the Johannesburg and Mauritius route and other related routes.

“The exemption allows the JV collaboration on the network, scheduling, revenue management and distribution across both carriers, thereby enhancing their existing bilateral offering,” states the CompCom.  

“In terms of the JV, the two airlines will align their economic incentives by pooling the revenue and costs associated with the provision of commercial passenger and cargo services on the trunk route between Mauritius and Johannesburg, and the behind and beyond destinations.

“Further, these airlines will synchronise passenger and cargo capacity, expand their joint networks, access new markets (which may not have been economically feasible in the past) and deliver consumer benefits and create efficiencies that would not be possible without the proposed joint venture arrangement.”

The CompCom granted the exemption, for a five-year period, saying the cooperation between the two airlines “will promote exports from South Africa.

“The two airlines will compete more effectively in the global market by using the JNB-MRU trunk route as the platform….It is expected that the JV will equally benefit the South African economy as it will lead to increased foreign currency earnings, improved capacity utilisation and employment in fulfilment of some of the objectives of the Act through increased passenger numbers, increased cargo capacity and increasing the route network in new markets.”

“In 2015, SAA and Air Mauritius concluded an agreement to broaden their codeshare agreement “to enhance greater connectivity between the continent, South Africa, Mauritius and other inter-continental routes.” From 1 July 2015 both airlines sold freely on one another’s networks with increased availability on its code-shared trunk route between Johannesburg and Mauritius.”