Kenya Airways is the key beneficiary of the collapse of Air Malawi after the national carrier was allowed to open new routes in the country and connect passengers between Lusaka and Lilongwe last week.

The carrier said on Friday that it would start flying to Blantyre —Malawi’s second largest city and the country’s financial capital—from June 3.

The Malawi government also restored rights that allow Kenya Airways to form pacts with its national carrier, granting KQ the leeway to operate flights between the country and other countries.

This is a climb-down following Malawi’s Department of Civil Aviation’s withdrawal of KQ’s rights to pick passengers from Lusaka to Lilongwe and vice versa due to a dispute between the Kenyan flier and Air Malawi.

The approval comes weeks after the collapse of Air Malawi, which enjoyed state protection, opening the way for KQ to gain a larger share of the traffic to and from the Southern Africa country.

KQ is also expected to resume flights to Lilongwe, Malawi’s largest city and the country’s political capital, after suspending operations in February following a nationwide strike.

“I am pleased to convey Government approval for your operations into Chileka Airport, Blantyre, and the exercise of 5th Freedom Traffic Rights on the Lilongwe-Lusaka sector as per your filed schedules effective June 3, 2013,” KQ said in a statement on Friday quoting Moffat Chitimbe, Malawi’s Secretary for Transport and Public Works.

“The approval of the 5th Freedom Traffic Rights follows an MoU signed between the Kenya and Malawi governments in 2008 which allows collaborative arrangements between designated carriers of both countries for their mutual benefit. Currently, Malawi has no national carrier so Kenya Airways will be the sole operator in the meantime,” added the statement.

In 2008 KQ signed a commercial agreement with Air Malawi that allowed the Kenyan airline to move passengers to and from Lilongwe to Lusaka. However, in what was seen as a protectionist move, the Malawian Department of Civil Aviation stopped KQ from serving the route connecting the two Southern Africa countries.

This followed a compliant from Air Malawi that KQ had terminated the agreement in February 2009 but continued operating on the route. But this ceased to be an issue in March after Air Malawi stopped operations on cash flow problems.

The airline has been bailed out twice and in November the Malawian government put out a tender looking for a strategic equity partner in a process that attracted KQ’s top rival Ethiopian Airlines.

KQ is racing for a larger share of the Southern Africa market as it deepens its growth strategy of connecting more African cities to Asia and Europe through its Nairobi hub.

Kenya Airways passenger numbers remained flat in the quarter to March on lower traffic in Europe and sluggish performance of Africa routes in what could delay the recovery of the national carrier.

The national carrier also reported slower growth in the quarter to December and a Sh4.8 billion net loss for the six months to September 30 and had warned investors that its earnings for the year to March would be at least 25 per cent lower than last year’s.