Ethiopian Eyes Rwandair As Strategic Partner

by Zelalem

Tayitu 14th

The management of Ethiopian Airlines has shown an interest in becoming a strategic partner of RwandAir, the national flag carrier of Rwanda.

RwandAir is a small but fast growing airline in Africa. The government of Rwanda is currently looking for a strategic partner that can help it in taking the national flag carrier forward. The Government of Rwanda has hired an international consulting firm, Ernst Young, and is studying a turnaround strategy. Currently, the airline is not making profit.

Reliable sources at Ethiopian told The Reporter that the management of Ethiopian has shown a keen interest in buying a stake in RwandAir. Sources said a delegation comprising senior officials of Ethiopian recently visited the headquarters of RwandAir and held discussion with officials of RwandAir and government officials. Senior executives of Ethiopian have expressed their interest in becoming a strategic partner of RwandAir.

Ethiopian Airlines Group CEO, Tewolde Gebremariam, confirmed his management’s interest in RwandAir but declined to give further details as the discussion is at an early stage.

RwandAir was established in its present form in 2009. It existed before as RwandAir Express which was semi government-owned. With only one wet leased twin otter aircraft RwandAir Express was a small airline.

The Government of Rwanda started RwandAir in 2009 as the sole proprietor and started investing in the airline buying new fleet, and expanding its route structure. Instead of investing in one go in the airline, the government is giving the company financial support yearly to upgrade its fleet and to expand facilities at its hub in Kigali.

An African airline industry analyst The Reporter talked to said that RwandAir as an airline is growing fast and making an impact on the market. “The reason the government is looking for a strategic partner is to help it move forward faster and to build its capacity. They are looking for like minded airlines like Ethiopian Airlines and others. It is not for financial support as such. There are many carriers wanting to partner with RwandAir since it is now IOSA [IATA Operational Safety Audit] certified and has good market reach/share in the region,” the analyst said.

At the moment, Rwandair has a new fleet of seven aircraft and will receive the 8th in April 2015.The average fleet age is under three years -very young and modern fleet. “The Government of Rwanda is committed to make RwandAir one of the best in Africa and going by the look of things they are likely to achieve that with or without a partner,” the analyst said.

RwandAir serves 16 domestic and international destinations in Africa and the Middle East. The fleet comprises two Boeing 737-800NG, one Bombardier Q400, and two Boeing 737-700. Ethiopian Airlines has a technical service agreement with RwandAir.

As part of its Vision 2025 growth plan, Ethiopian is implementing a multi hub strategy. The Ethiopian national flag carrier is a strategic partner of ASKY, a pan African airline based in Togo Lome. ASKY which began operation in 2010 serves 22 destinations in West and Central Africa. Ethiopian has a 40 percent stake on ASKY.

Ethiopian has also invested on another start up airline in Southern Africa, Malawi Airlines Ltd. Malawian Airlines based in Lilongwe began operation last year from its hub at Lilongwe International Airport. It serves six domestic and regional destinations. Ethiopian has a five year management and technical service agreements with both airlines.

More recently, Ethiopian signed a Memorandum of Understanding with the government of South Sudan that enables it to invest on a new start up airline in the youngest nation.

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