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Qatar Airways Eyeing Stake in RwandAir

A Qatar Airways-painted Boeing 787-9 Dreamliner on a test flight. (Photo: AirlineGeeks | Katie Bailey)

Two months after taking a 60 percent stake in the newly constructed Kigali’s Bugesera International Airport in Rwanda, an airport that will accommodate 10 million passengers yearly, Qatar Airways is now negotiating for a 49 percent stake in RwandAir.

This news was first announced by Qatar Airways CEO Akbar Al-Baker speaking on the sidelines of an aviation summit on Feb 5 in Doha.

“We are tough negotiators… we will take our time to negotiate,”said Al Baker as he expressed his confidence in reaching an agreement for the state-owned airline.

Al-Baker also went on to add: “The attraction of Kigali is its location, the stability of the country and the very favorable business environment that exists in that country.”

According to Reuters, RwandAir CEO Yvonne Manzi Makolo confirmed there were talks with Qatar Airways to sell stakes to the giant airline declining to comment further on details of the extent of the ongoing negotiations.

Restrictions

Since 2017, Qatar Airways has had to deal with restrictions imposed by its neighboring Gulf states that include Saudi Arabia and the UAE among others following a regional political dispute forcing Qatar Airways to follow a longer route while offering its services to avoid the banned airspace.

However, since the ban does not necessarily apply to non-Qatari airlines, the idea of acquiring a stake in RwandAir will widen the Qatari airline’s reach in the African aviation market and also potentially helping it bypass restrictions imposed on it by its neighboring Arab states.

RwandAir

The African airline operates a fleet of 12 aircraft offering service to 29 cities in Africa, the Middle East, Europe and Asia. It recently started flights to Guangzhou, China and is currently readying for new routes to the U.S.

The airline is in its 11th year running having not registered any profit since it first commenced operation back in 2009.

The airline has been surviving on state subsidies that total to just over two percent of the country’s total GDP, keeping in mind the country’s per capita income is around $800 and has a total GDP of $10 billion. The airline is reportedly used by the national government to facilitate tourism growth that grows at an annual rate of 9.66 percent.

The deal with Qatar Airways will provide for a strategic and technical partner for the Kigali-based airline as well as providing financial support that will, perhaps, increase RwandAir’s capacity to compete in the region.

Growth Structure

With a fleet of over 250 aircraft, Qatar Airways has also invested in major airlines, buying stakes in Hong Kong-based Cathay Pacific, China Southern Airlines and International Airlines Group (IAG). It is now aiming to double its shares in LATAM. Right now, Qatar Airways owns a 10 percent stake in South America’s largest carrier.

“In Africa, there is big demand for air travel and today, Africa is very poorly connected so we always look for opportunities in our field for investment,” said Al Baker.

According to IATA, the African aviation market is among the fastest-growing aviation market sitting second at a 4.6 percent annual growth rate after the Asia-Pacific at 5.2 percent.

Victor Shalton

Author

  • Victor Shalton

    Born and raised in Nairobi, Kenya, Victor’s love for aviation goes way back to when he was 11-years-old. Living close to Jomo Kenyatta International Airport, he developed a love for planes and he even recalls aspiring to be a future airline executive for Kenya Airways. He also has a passion in the arts and loves writing and had his own aviation blog prior to joining AirlineGeeks. He is currently pursuing a bachelor’s degree in business administration at DeKUT and aspiring to make a career in a more aviation-related course.

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