Will RwandAir Be The Next Big African Airline?
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 has been the airline of Rwanda since 2002. Photo: Getty Images  State-owned development of the airline  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 civil war. 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. Air Rwanda operated one Boeing 707 aircraft. Photo: Clinton Groves via Wikimedia  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. Stay informed: Sign up for our daily and weekly aviation news digests. Growing its fleet and operations  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 (ATDB.aero), 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. As it expanded, Rwandir added several new aircraft, including the Bombardier Q400 / Dash 8. Photo: Bombardier  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. RwandAir has purchased two new 737-800 aircraft. Photo: RwandAir  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. RwandAir operates one A330-300. Photo. Rwandair  And building up its routes  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 Rwandas 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. RwandAirs route to China is an extension of its route to Mumbai  a growth strategy it plans to use for the US as well. Image: GCmap.com  Eyes on routes to the US  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 fifth freedom traffic rights to operate from Ghana. However, it will have to meet safety standards with FAA Category 1 rating before operating the route. RwandAirs planned route from Kigali to JFK will open up new markets for the airline. Photo: GCMap.com  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 airlines two A330s. There is no indication of further aircraft acquisition yet, so potentially other routes would have to be switched to a narrowbody. Huge potential for African aviation  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 worlds population. The average 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. Ethiopian Airlines has grown rapidly to be the largest in Africa  but others can also grow in the market. Photo: Vincenzo Pace | Simple Flying  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. Improving financials  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. Passenger volume more than doubled between 2013 and 2017. Photo: RwandAir  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. Investment from Qatar Airways  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 Cte dIvoire in West Africa, and South Africas Comair is a future potential option. And it has a strong interest too in Rwanda. Qatar Airways uses its diverse fleet to fly to 26 African destinations (as of May 202). Photo: Getty Images  In 2019 it bought a 60% share in Rwandas 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. RwandAir is based at Kigali International Airport (KGL)  with investment, a new airport is being built. Photo: RwandAir  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. Taking a stake in RwandAir  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 airlines 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. 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