PRECISION Air and Kenya Airways have applied to the Fair Competition Commission (FCC) for the renewal of their code sharing and joint venture agreements.
The two airlines entered the agreements seven years ago and now are seeking the approval of FCC to renew it.
In the public notice issued on March 3, the parties to the application for exemption of agreement have provided scope of the market to be that of the provision of scheduled air transport and cargo between Tanzania and Kenya in respect of which the parties do not have overlapping routes.
“Pursuant to rules of the Competition Rules 2018, FCC has begun the review and investigation of the intended application for exemption of agreement with a view to examine whether and the agreement prevents, restrains or distorts competition no more than is reasonably necessary to attain the benefits
“And the benefits to the public resulting from the agreement outweigh the detriments caused by preventing, restraining or distorting competition,” reads part of the notice.
FCC further notified petitioners to submit their petitions with a view to assist the commission in reaching just and reasonable decision with regard to the intended application for exemption thought.
The petitioners are required to notify FCC within 14 days by way of writing submissions from the first day of publication of the public notice.
On the 21 December 2011 Precision Air made history by being the first airline in Tanzania to list on Dar es Salaam Stock Exchange with a total of 7,056 investors who took part in the Initial Public Offering in November 2011.
The new shareholders have therefore taken a stake of 16 per cent in the company. This now means 58 per cent of the company is owned by Tanzanians, 41 per cent Kenya Airways and 1 per cent by other nationals, the anchor shareholders, being Kenya Airways and local Tanzanian businessman.
Prior to that, in 2003 when Kenya Airways acquired a minority 49 per cent shareholding leaving majority 51 per cent shares in the control of one local Tanzanian businessman.
However, the airline also works closely with a number of companies and has code-share agreements with over ten reputable airlines worldwide.