There is growing indication that Ethiopian Airlines has engaged in
direct talks with the Rwandan government, seeking a stake in national
carrier RwandAir, even though no formal privatization process is in
place at this moment in time.
It is thought that RwandAir’s Chairman of the Board of Directors,
Girma Wade, himself a longserving former CEO of Ethiopian Airlines and
brought to RwandAir to benefit from his extensive experience in
successfully and profitably managing Africa’s largest airline, has been
instrumental to set up the talks. Sources in Kigali have described as
them as ‘exploratory’ but also conceded that this has been
going on since sometime late last year. Confirmation has also been
received from Addis Ababa where ET’s CEO Tewolde Gebremariam has
yesterday confirmed to Reuters that talks were ongoing.
Grapevine talk has it that Ethiopian may seek a shareholding anywhere
between 26 and 49 percent and then take on a greater role in the
management of RwandAir, over and above having an Ethiopian already serve
in the capacity as General Manager Commercial, recruited in mid 2014.
Ethiopian Airlines, one of Africa’s three members in Star Alliance,
is already Africa’s undisputed market leader but has over the past years
sought to expand influence on the continent through strategic
partnerships. First out of the starting blocks was ASKY in West Africa,
followed by Malawian Airlines. Talks with the regime in Kinshasa have
also been going on to establish a new national airline in the Congo,
probably along similar lines like Malawian Airlines, where Ethiopian
holds 49 percent and has seconded management to run the company.
Should talks with the Rwandan government yield results it would
substantially widen ET’s reach in the Eastern African region, largely at
the expense of Kenya Airways, which, according to a source close to the
airline, has been caught almost unaware of the talks and the unfolding
schemes by main African rival Ethiopian. Kenya Airways, saddled with
losses in the recent past, seems to pursue a single, standalone growth
strategy and with Ethiopian now having two financial partnerships
already (ASKY and Malawian Airlines) and potentially a further three
falling into place in the near future (Congo, Rwanda and South Sudan)
will the gap between the two widen further and restrict options for KQ
following suit.
RwandAir already enjoys a code share with Ethiopian for flights
between Kigali and Addis Ababa and has maintenance agreements in place
to service their Bombardier Q400NextGen aircraft, a second of which is
due to join by early Q2.
RwandAir, serving 15 destinations out of Kigali, operates a fleet of
four B737NG’s, two Bombardier CRJ900NextGen’s and currently one Q400,
but has another B737-800NG on order for delivery late this or early next
year. The airline is also eyeing the B787 Dreamliner to commence long
haul flights out of Kigali by 2017/18 to China, India and Europe.
Only recently has RwandAir received fifth freedom rights for flights
from Entebbe to Juba and is reportedly waiting for the Kenyan regulators
to approve slots for two daily fifth freedom flights between Entebbe
and Nairobi.
Fully owned and backed in its development plans by the government of
Rwanda has the airline expanded rapidly in recent years. However, a
financial stake by Ethiopian may relief the Rwandan government of a
significant amount of cash requirements for future investments, if the
new suitors can be contractually tied down to help pay for turning
Rwanda’s vision for their national airline into reality.