Qatar Airways has big plans for Africa. Having already bought a 60% stake in the new Kigali Airport, the Middle East airline now has its sights set on something more, well, airline-ish. Qatar is reported by Reuters to be in talks to buy as much as 49% of RwandAir, the state-owned airline of Rwanda.
The plans to purchase the airline come as no big surprise. Middle Eastern carriers have, for the longest time, been vying for a place in the growing African aviation market. In fact, far more international flights are operated by foreign carriers than by native airlines, one of the biggest of which is Emirates.
Last summer, Emirates announced a massive route shake up that saw it exiting a number of Australian destinations in favor of African alternatives. The carrier launched service to Casablanca, Accra, Abuja, Guinea and Senegal. Clearly Qatar doesn’t want to leave all the good stuff for its neighboring rival to eat up, and is, therefore, planning its own assault on Africa’s aviation market.
What do we know so far?
CEO of Qatar Airways, Akbar al Baker, spoke at a briefing at the CAPA Qatar Aviation conference today about his vision for the future of Africa. While discussing Qatar’s December purchase of Kigali Airport, according to Bloomberg, he commented,
“It will be a very efficient hub in a very stable country in the heart of Africa. And we’re going to take a stake in their national carrier because we see that Africa is another region that has huge growth potential.”
He went on to say that Qatar is negotiating for 49% of the airline. This would leave Rwanda’s government with the controlling stake in the carrier. Baker did not reveal any monetary figures being discussed, but noted that “We are very tough negotiators … we will take our time to negotiate.”
Why does Qatar want Rwandair?
As previously mentioned, Africa is a huge growth market that has incredible potential for the future. Airlines such as Rwandair and Uganda Airlines have some tough competition to face up to, with the likes of Ethiopian, Egypt Air and Royal Air Maroc scooping up the brunt of the local traffic. Having an investor like Qatar on board could help this carrier stave off the seemingly inevitable financial distress that typically plagues state-owned airlines.
But it’s not all a good deed for Qatar. In fact, this could turn out to be a strategic workaround for something that’s been hampering the airline’s growth for years. Qatar is blocked from overflying the airspace of its neighbors, including Saudi Arabia, the UAE, Bahrain, Egypt and Jordan, and has been since 2017. This makes some of its aircraft routes somewhat awkward.
For example, this route between Doha and Entebbe (Uganda) has to fly straight out over the Persian Gulf, avoiding UAE airspace, overfly Oman (which hasn’t banned it from its airspace) and finally make its way across Ethiopia and into Uganda.
An African airline, regardless of ownership, would not face the same restrictions. Therefore, Qatar could use Kigali as a hub for African travelers, funneling them into Doha and into Qatar’s extensive international network.
It’s potentially a win-win for both airlines, as long as the price is right.