In February, it was reported that Qatar Airways had purchased a 49% stake in RwandAir. However, since then, there hasn’t been much talk about the deal. Nonetheless, the company’s CEO, Akbar Al Baker, reminded people this week that his firm still a stakeholder in the African outfit.
Still committed
During a Fireside Chat hosted by Aviation Week on Tuesday, Al Baker was asked about Qatar Airways’ investments in other airlines amid the global health crisis. He emphasized that his business conducts these deals for the long-term as it is not a financial investor, it is a strategic investor.
Altogether, the group is not looking for mere financial gain. It is looking at the long-term interests of the companies it interacts with. Nonetheless, the executive is not looking to purchase stakes in other airlines at the moment.
It will see out the impact of the pandemic before making the next step. For now, it is concentrating on its current investments, such as its stakes in International Airlines Group, China Southern, Cathay Pacific, LATAM Airlines Group, and, more recently, Rwandair.
Al Baker said the following in the talk with Aviation Week:
“Not at the moment, we will not like to invest in any other airline during this difficult period. We will wait and see what is the outcome of our industry in the next year or so, and then we will consider our next step in our strategic investments in airlines. Don’t forget that we are still an investor in RwandAir, the carrier in Africa.”
Tactical move
Along with the stake in the flag carrier of Rwanda, Qatar Airways has also signed an agreement to take control of 60% of the country’s new Bugesera International Airport. This deal, which is thought to be with approximately $780 million, would see the firm significantly influence aviation activity the nation and surrounding regions.
Rwanda is around 2,000 nautical miles from Qatar, and it is a landlocked country in East Africa. Therefore, on paper, it seems like it is not such a strategic investment. However, in reality, the move could be a masterstroke from Qatar Airways.
Since 2017, Qatar has been blocked from overflying the airspace of several of its neighbors, including Saudi Arabia, the UAE, Bahrain, Egypt, and Jordan. Therefore, its national carrier has had to find alternative yet efficient ways to conduct some of its routes.
Since the ban doesn’t apply to non-Qatari carriers flying to Qatar, RwandAir could carry passengers from Africa over the blocked airspace to Doha. Subsequently, passenger activity between Qatar and Africa would continue over the blocked areas without restriction. Moreover, Qatar Airways’ stakes in the Rwandan airline and airport means that they also get a handsome slice of the pie.
Long-term mentality
Additionally, the move will also pay off for all parties in the long run. There is massive potential for growth in Africa, but a few key airlines such as Ethiopian, Egypt Air and, Royal Air Maroc have an overwhelming presence in the continent.
Therefore, having a major player like Qatar Airways involved will help Rwandair compete. Furthermore, with African aviation activity set to reach new heights by the time this decade is over, Al Baker’s group is in a prime position to have a strong foothold in the market.
Ultimately, Qatar Airways has shown that it is focused on supporting its current investments for the long-haul. So, its business in Rwanda is not a flash in the pan, the deals should see great returns across the board over the next few years. Once the global aviation industry regroups, the projects in Rwanda will see exciting growth.
What are your thoughts about Qatar Airways’ RwandAir stake? How do you see the deal progressing over the next few years? Let us know what you think in the comment section.
