BusinessCountry FocusFrom Rwanda to the world

Mon,23Oct2017

Posted on Tuesday, 06 June 2017 17:04

From Rwanda to the world

By Mark Anderson in Kigali

rsz rwandair

RwandAir is in the midst of an ambitious expansion plan that would see it serve four continents, as the airline seeks a new chief executive to lead the way

 

Just seven years ago, Rwanda’s state-owned airline did not own any planes. The carrier, which was then known as RwandAir Express, jetted in handfuls of tourists from five regional destinations using a few old leased turboprop planes.

Since then, the airline has become a continental operator. It has a fleet of 26 aircraft, including an Airbus A330 and 10 Boeing 737s, which now serve 22 destinations. Most of its routes are in Africa, and in June the airline will establish a West African hub in Cotonou.

But RwandAir is beginning to set its sights further afield. In April, the airline launched a new service to Mumbai, and in late May it inaugurated its first flight to Europe through the Kigali-London route. In June, the airline is set to launch a new route to China, and next year it aims to begin regular flights to the United States.

John Mirenge, the airline’s chief executive officer, was at the helm of this expansion until he was sacked in April. Before his dismissal, he told The Africa Report: “We are in our seventh year of growth; we intend to grow bigger,” as the sound of jet engines roared outside his office overlooking Kigali International Airport. “We hope by the end of this first half [of the fiscal year] we should be carrying about 700,000 passengers.” It transported 600,000 over the same period the previous year.

Mirenge declined to provide RwandAir’s financial figures but said he is confident that the airline is taking the right steps to be profitable: “For as long as you are at the phase we are at, you can never be profitable because you are still going through the heavy investment phase. And we’re still taking on new aircraft, and our model has been to really gun for new aircraft straight from the factory. So our investment is heavy, and it takes time to recoup all that investment. If you ask me when will we start to be cash positive, [the answer is] very soon because that I need quickly. But profitable, it will take a bit of time.”

Codeshare agreement

RwandAir’s strategic partnership with Ethiopian Airlines, another state-owned carrier, is crucial to the airline’s strategy. “Over the years we have forged a much closer relationship in that [Ethiopian Airlines] has come in to support us on the technical side of things. They support our 737s. They support our Q400 fleet. We have Ethiopian ­engineers, Ethiopian engineers sitting at our base here,” Mirenge says, gesturing outside his office. 

RwandAir has a codeshare agreement with Ethiopian and special pro-rate agreements, “so we are able to sell [their] network [and] they are able to give us special fares for us to sell,” Mirenge said. RwandAir also has codeshare agreements with Brussels Airlines and is considering new European partners, including KLM, Lufthansa and British Airways. 

Mirenge was sacked as chief executive on 5 April during a cabinet meeting chaired by President Paul Kagame, with no reason given for his dismissal. Rwanda’s foreign minister Louise Mushikiwabo, who was present at the cabinet meeting, tells The Africa Report: “We need more aviation people and airline people, as opposed to just good-mannered people.” Mirenge was RwandAir’s chief executive officer for seven years and before that he served as the chief executive of Crystal Ventures, the ruling party's investment fund. Mushikiwabo adds that the government is “shopping around” for a new executive with a stronger aviation background. 

RwandAir has hired experts from Singapore and South Korea to advise on its strategy, Mushikiwabo says. In the meantime, Colonel Chance Ndagano has been brought in as acting chief executive until a replacement is found. 

From the June 2017 print edition

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