There has been some impressive growth in African aviation in recent years. Ethiopian Airlines
and Kenya Airways have seen significant expansion, and Rwanda-based RwandAir could be on its
way to something similar. It is still early days, but RwandAir has already seen some solid
expansion, and with investment from Middle Eastern giant Qatar Airways, the sky could
be the limit. It is certainly an airline to watch over the coming years.
RwandAir is the state-owned national airline of Rwanda. It followed on from the previous
national airline, Air Rwanda. This airline was founded in 1975 and operated a limited
network of passenger and cargo flights domestically and regionally. Domestic service ceased in
1994 during the Rwandan genocide. International service was taken over by Uganda-based
Alliance Air, with a 49% stake in the newly formed Alliance Express Rwanda. The Rwandan
government maintained a majority holding. Alliance Air ceased operations in October
2000, and South African Airways took over the operation of the Rwandan subsidiary. This
continued until 2002 when it passed back to full government control and ownership as the
new airline Rwandair Express. In 2009 it was re-branded as RwandAir.
In its first few years, RwandAir operated just a small domestic and regional network,
with leased and secondhand aircraft. According to fleet data obtained from AeroTransport
Data Bank , its early aircraft included the DC-8s, 737-300, and the Dash 8.
It introduced the Bombardier CRJ200 in 2009, with two aircraft coming from Lufthansa. They
stayed with the airline until 2012 when the airline purchased new CRJ900 aircraft. It
also stuck with Bombardier and added the Q400 (Dash 8) in 2013.
The airline took on two leased 737-500s in 2010. And in August 2011, it took ownership
of its first new aircraft, a 737-800. It added a second new 737-800 later the same year and
two further leased new aircraft in 2016 and 2017. The airline is not alone in choosing
the 737-800. It is the most sold of all 737 variants – popular with many airlines for
its compromise on capacity and range. As of June 2021, the full airline fleet consists
of: A330: one A330-200 and one A330-300
Boeing 737: two 737-700 and four 737-800 Bombardier CRJ: two CRJ900ER
DHC Dash 8: two DHC-8-Q400 Two of the 737-800s are leased from Air Lease
Corporation, the 737-700s are leased from AerCap and Dara Aviation. One of the Dash
8 aircraft is leased from Montrose Global. RwandAir owns all the other aircraft in the
fleet. RwandAir did have orders for two 737 MAX and
two A330-900 aircraft. However, these orders were canceled in 2020 due to the slowdown
in aviation and uncertainties over delivery dates.
Routes served have expanded along with the fleet. Today, it flies to 26 destinations
in 40 countries. Regional routes include Accra, Cape Town, Harare, and Zanzibar. And long-haul,
it has operated to Dubai, London, Brussels, Mumbai, and Guangzhou.
Adding China to its route map in 2019 was a big boost for the airline. China is Rwanda’s
largest exporting partner, making up 21.24% of its total export share value in 2016. The
route operates as a fifth freedom route from Mumbai – a smart way to grow its international
routes. Pre-pandemic, it had been hailed as a “resounding success.”
This is a vital route for cargo as well as passengers. After suspension at the start
of the pandemic, it was quick to resume it for cargo services.
The airline has expanded its route map to Africa, the Middle East, and Europe but not
yet the US. Long-haul flights to the US are a major boost for any African airline, and
RwandAir is keenly planning the start of such flights.
In early 2021, the airline submitted a request to the US Department of Transport to operate
a route from Kigali to New York, potentially starting in December 2021. In February 2021,
it was reported that the airline had secured rights to operate from Ghana. However, it
will have to meet safety standards with FAA Category 1 rating before operating the route.
This stop in Accra, Ghana would allow it to serve passengers from two African markets.
It would obviously have to be operated by one of the airline’s two A330s. There is
no indication of further aircraft acquisition yet, so potentially other routes would have
to be switched to a narrowbody.
The airline certainly has regional growth prospects on its side as it grows. The African
aviation market has long been seen to offer strong growth potential. In 2018, Africa accounted
for 2.8% of total global Revenue Passenger Kilometres (RPK) despite having almost 17%
of the world’s population. The verage load factor was 71% – 10% less than the global
average. In 2018 (pre-pandemic), IATA forecast annual
growth of 5.9% over the 20 years for African aviation – the highest rate globally. Of
course, this will have changed in the current market, but the potential for growth in the
future remains. Rwanda has strong potential as African economies
and aviation improve. Some discussions have likened it to Singapore. Of course, there
are many differences (and RwandAir is not suddenly going to become a long-haul giant
like Singapore Airlines), but some things are similar.
Rwanda is centrally located in Africa and could do well with connections, just as Singapore
Airlines does within Asia. It is also a small country with several larger regional neighbors.
And amongst African countries, Rwanda has one of the most business-friendly environments.
Alongside its fleet and route growth, RwandAir has steadily grown passenger numbers and revenues
but is still struggling to turn a profit. Passenger volume (according to ch-aviaiton.com)
in 2013 was 408,000. By 2016 this had increased each year to reach 586,000, and in 2017 it
lept to 885,000. Revenue increased over the same period from $91.6 million to $221.6 million.
Profit has been challenging for the airline so far, though. The airline has only posted
a profit for one year up to 2020 – this was for $2.82 million in 2014. In 2019 it
recorded a loss of $24.1million, down significantly from $59.8 million in 2018.
With high costs as it grows affecting profitability, an investment could be a real boost for the
airline. Qatar Airways believes strongly in growth in the African market. The airline
has added many destinations in 2020 and 2021. It also sees partners as important to its
growth. It has an interline agreement with Air in West Africa, and South Africa’s Comair
is a future potential option. And it has a strong interest too in Rwanda.
In 2019 it bought a 60% share in Rwanda’s new Bugesera International Airport in Kigali.
The reported $780 million paid would allow construction of a larger airport, with the
second phase of development taking annual passenger capacity up to 14 million. The scale
highlights well the belief in the strength of the market.
The airline will be involved in the construction, ownership, and management of the new airport.
Such an infrastructure investment could well make sense on its own in a growing sector.
But Qatar Airways is keen to go further and take a stake in the airline as well.
In 2020, it was reported that Qatar Airways was in talks to purchase a 49% stake in Rwandair.
Attention may have shifted during the pandemic, but the intent has not changed. According
to reporting by ch-aviation.com, the talks were in their final stages in March 2021.
Speaking with Simple Flying in May 2021, the airline’s CEO, Akbar Al Baker, outlined
the importance of his partnership with the central African carrier and the proposed takeover.
He explained his vision for this, saying: “Africa is the most unserved continent,
and the airlines that are serving them are taking the passengers to the cleaners. My
job is to provide them a world-class airport and partner with RwandAir to give them the
kind of service we provide in Qatar Airways.” If flying picks up in Africa later in 2021,
RwandAir could be well placed to capitalize. Hopefully, its investment from Qatar Airways
will be finalized, and routes to the US should be on the way. It may have canceled recent
aircraft orders, but it retains a young fleet, and could always expand this once the market
improves. Is RwandAir set up to take advantage of the
growth potential in African aviation? Expansion through partners is common in Africa – do
you think this will work with Qatar Airways? Feel free to share your thoughts in
the comments.