South African Airways and Kenya Airways have signed a co-operation agreement with the long-term ambition of creating a pan-African airline.

SAA and KQ, both of which have been plagued by financial and administrative woes, say their collaboration will make the aviation sector more competitive.

They signed a memorandum of understanding to increase their mutual growth potential.

The collaboration could entail sharing services in terms of routes, fleet maintenance and repair, as well as seeking opportunities to achieve economies of scale.

Both SAA and KQ emphasised that they are still free to pursue cooperation with other carriers.

SAA re-started its operations last week after being grounded for more than a year because of bankruptcy.

KQ has been hit hard by Covid-19, and has focused on transporting cargo to minimise losses. It also plans to have the airline nationalised after its code-share agreement with Air France-KLM ends in September.