South African Airways (SAA) and Kenya Airways (KQ) have signed a cooperation agreement with a long-term view to create a pan-African airline group, the two companies said on Tuesday. "It is not a merger but a partnership that seeks to re-organise KQ and SAA assets into an ecosystem that will make the South African and Kenyan aviation sector more competitive," Kenya Airways said in a statement. SAA said in a separate statement that the pact did not preclude either firm from pursuing commercial cooperation with other carriers and said collaborating would help contain costs. State-owned SAA restarted domestic flights last week and this week launches a scaled-down international service to five African capitals, after its longstanding financial woes were exacerbated by the COVID-19 pandemic. read more It exited administration in April thanks to another state bailout, and the government has said it will sell a 51% stake in the airline to a local consortium. Kenya Airways" passenger business has also been severely constrained by COVID-19, and it has focused on cargo to minimise losses. Kenya has plans to renationalise the airline, whose code-share agreement with Air France-KLM (AIRF.PA) for Africa-Europe routes ends this month. Reporting by Alexander Winning in Johannesburg and George Obulutsa in Nairobi; editing by David Evans