QR Cargo intends to grow its empire

… by buying a 49% stake in fast-growing African carrier, RwandAir. Last week, the state-owned Arabian airline confirmed ongoing acquisition negotiations between both companies. If
successful, RwandAir will enlarge the Gulf carrier’s spreading empire.

The intended step follows Qatari investments in South American LATAM Airlines (10%), and Italian carrier, Air Italia (49%). In contrast, recent attempts by Qatar Airways to buy into the
British-Spanish IAG Group and American Airlines have failed. Both belong to the oneworld alliance, as does QR. Following the rejection, QR threatened to leave the oneworld club, but has not done
so up until now.

African hub
Yet, it would appear that these exit plans are temporarily shelved, since the Doha-based carrier seems to prefer a different strategy: Forming an own airline group by buying into carriers that
promise added value in the mid-term. One such a candidate fitting the role as a promising QR satellite, is Kigali-based RwandAir. Provided the forthcoming deal is concluded, of which there is
little doubt, RwandAir will become a cornerstone in Qatar Airways’ African strategy. This aims at building a continental hub and spoke system and simultaneously feeding passengers and cargo into
QR’s global network via their Doha-based Hamad International Airport.

RwandAir operated Boeing 777 unloading flowers at Brussels Airport  -  photo: CFG / hs
RwandAir operated Boeing 777 unloading flowers at Brussels Airport – photo: CFG / hs


Mota Engil is out, QR is stepping in
The step follows the Qatari’s investment in Kigali Bugesera International Airport last December, purchasing a 60% stake in Rwanda’s forthcoming largest airport, estimated to cost US$1.3 billion.
The facility is still under construction.
Prior to this, Portuguese investor Mota Engil was forced out of the deal by Rwanda’s Finance Minister, Claver Gatete. The ousting follows a controversy between the Kigali government and the
Portuguese company about the financing of the project, including grave differences about its dimensions. “We want a bigger-sized airport as originally conceived, and that is why we were
looking for a bigger investor,”
Mr. Gatete told the media. According to him, Mota Engil was disqualified due to a lack of funds for accomplishing the enlarged project in time and according
to the revised plans.


Confidence in Rwanda
Originally, Kigali Bugesera Airport was designed to accommodate 4.5 million travelers a year. However, the capacity was upped by the government to 7 million passengers, doubling their number to
14 million until 2032, once a second runway is scheduled to be operational. 
At a meeting in Doha, restless Qatar Airways CEO Akbar Al Baker pointed out that the intended cash injection into RwandAir is based on the confidence his carrier has in the East African country.
As a reason for this financial engagement, he lauded Rwanda’s political stability, attractive strategic location, and the positive business environment. He added to this that Qatar Airways is
considering investing in a hotel to accommodate cabin crew, technicians and aviation experts near to the new airport. 

High price
The three projects – Kigali Airport investment, QR-RwandAir partnership, and the hotel plans – might further stimulate the East African country’s economy and open up doors for further financial
initiatives by Qatari businesses or the Doha government.
At the same time, however, dependence on a very potent, politically and religiously influential, and economically powerful major investor is the price the Rwandan government will have to pay,
critics hold.


Heiner Siegmund

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Source: Cargoforwarder

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