Qatar Airways In Discussions To Buy 49% Stake In RwandAir

Let’s be clear…every corporation worldwide recognizes the value and wants a piece of Africa regardless to what the media is broadcasting!

United Airlines announced they wanted a piece of the action and just recently began flying non-stop from Newark (EWR) to Capetown (CPT).

American Airlines determined they wanted a piece of the action after The Moroccan National Tourist Office announced that Morocco received 12.3 million tourists in 2018, up 8 percent from 2017.

In fact, American’s new service from Philadelphia (PHL) to Casablanca (CMN) marked the the airlines’ FIRST EVER entrance into the continent of Africa.

Airlines added additional flights to meet the demand for “Year of the Return.”

The list goes on. Don’t believe me, google “Mandarin official language of South Africa.” Everyone is moving in!!

STAKE IN THE NEW AIRPORT

Qatar Airways also sees growth potential in Africa. This past December, the airline agreed to purchase a 60% stake in Bugesera International Airport in Kigali which is set to open in 2022. When finished, it will be one of the largest and perhaps most modern airport in Africa.

But that’s not all…

STAKE IN RWANDAS NATIONAL CARRIER

With the Gulf blockade continuing into a fourth year, Qatar Airways is searching for new opportunity. Months after purchasing a 60% majority stake in the airport, the airline is now in discussions to purchase a 49% stake in Rwanda’s national carrier, RwandaAir.

This purchase is extremely strategic as it would would widen the company’s reach in one of the world’s fastest-growing aviation regions, and potentially help it bypass restrictions imposed on it by some Arab states.

Akbar al-Baker, Qatar Airways CEO, told reporters on Wednesday:

“We are very tough negotiators … we will take our time to negotiate.”

STRATEGIC PARTNERSHIPS

There’s no doubt the political rift and subsequent gulf blockade has impacted Qatar Airways. At the minimum, they have been forced to fly longer routes to avoid the blocked airspace of some of its neighbors thus increasing the amount of fuel purchased and burned.

However, the ban from airspace does not apply to non-Qatari airlines flying to Qatar. In this effort, RwandAir could deliver passengers from Africa over the blocked airspace to Doha without any airspace restrictions.

We’ve seen this strategy before as Qatar Airways purchased stakes in IAG (the parent company of Aer Lingus, British Airways and Iberia), China Southern, Cathay Pacific and Chile’s LATAM Airlines Group.

A DIG AT DELTA?

You may recall back in September, Delta surprised everyone by outmaneuvering American Airlines and plucking LATAM from under their nose by purchasing 20% stake in the airline.

Al-Baker said the airline, who currently has as 10% stake in LATAM, could be interested in increasing its stake and working with fellow shareholder Delta Air Lines saying:

“When the right opportunity comes and at the right price we will look at increasing our investment in LATAM.”

FINAL STAMP

As we all know, Qatar Airways has historically had a unique and contentious relationship with the US3 (Delta, American, United) which have accused Gulf airlines of receiving unfair government subsidies, distorting competition and costing Americans jobs. Delta has been leading this charge against the ME3 (Qatar, Emirates, Etihad) to which they have rejected such accusations.

There’s no doubt that Rwanda is an interesting investment choice for Qatar Airways, though there is definite logic in the strategy.

What do you think about Qatars potential partnership?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s