ch-aviation weekly news roundup

Hi everyone,

A few years ago, I used to run a blog which focussed exclusively on the African market - The African Aviation Tribune. During its relatively brief existence, it covered all aspects of the continent's aviation industry in an effort to help shed light on a region that has long been neglected from a news and also an investment perspective. Now granted, there were frequent stories of mismanagement, corruption, and political shenanigans at both private and state-owned airlines but one carrier did stand out as a breed apart. No, not Ethiopian Airlines, I'm talking about RwandAir, the state-owned national carrier of the East African state of Rwanda.

In the years following the horrific genocide of 1994, Rwanda has not only managed to avert spiraling into a Somalia-esque type anarchy, it has transformed itself into one of Africa's most dynamic economies averaging annual growth of 7-8% since 2003. Given its landlocked status, Paul Kagame's government has recognized the vital role good international connectivity - air transport in particular - plays in both attracting investors as well as creating cost-competitive exports. While it may not have access to a coastline, Rwanda's ideal geographical positioning in the heart of Africa, coupled with its relatively low altitude (1,500metres ASL), makes it the perfect site for an intercontinental aviation hub connecting East, West, Central, and Southern Africa to Europe, Asia, and even North America. In fact, it is upon this premise that government has based its plans to develop the upcoming Bugesera International Airport, set to see if first movements later next year.

But what good is a fancy airfield if there's no-one to use it? Cue RwandAir. Founded in September 2002, RwandAir Express, as it was then known, began life as, for what was for all intents and purposes, a virtual carrier. Using a variety of wet-leased equipment, it offered limited regional services throughout East and Central Africa - nothing glamorous by any means and I don't think there were many at that time who took it too seriously.

But, under maverick CEO John Mirenge's leadership, RwandAir has grown from strength to strength. Taking a pretty low-key approach, it has avoided all the pitfalls that generally beset your garden-variety, state-owned African airlines - political interference, bloated workforces filled with party loyalists, corruption, cronyism and nepotism - and successfully evolved into a fully certificated carrier operating its own aircraft AND even turning a slight profit in recent years. While it has primarily focussed on developing regional African connectivity from its Kigali hub using B737, CRJ, and Dash 8 equipment, RwandAir made waves last year when it announced it had ordered two A330 widebody jets for use in developing longhaul routes. An application for a Foreign Air Carrier Permit (FACP) filed with the US Department of Transportation this week confirmed plans for a tentative US market debut in August 2018 along with the launch of services to China, the United Kingdom (due later this quarter), and even Germany. On top of that, it has also revealed plans to add four more A330s to its fleet this year.

But for how long will this be sustainable? Given the proximity of Ethiopian Airlines' and Kenya Airways' Addis Ababa and Nairobi hubs, it's only a question of time before someone's toes invariably get trodden on. But herein lies RwandAir's strength - its independence. While it has signed commercial and technical cooperation agreements with Ethiopian Airlines, it has thus far avoided committing to a strategic partnership agreement. This has allowed it more operational flexibility and independence thus curbing its forced repositioning as a simple regional feeder carrier to either Ethiopian or Kenya Airways (this, apparently, was one of the mitigating reasons why Air Austral was chosen as a strategic partner for Air Madagascar over Ethiopian).

So, in light of all of this, it was with great sadness this week that we read Mr. Mirenge will not be part of the RwandAir team going forward. For whatever reason he is leaving, Mirenge has shown that the notion of a viable, well-run state-owned African carrier, unlike unicorns/leprechauns/accurate US and UK election pollsters, does actually exist!

It is my hope that Mirenge's successor, Colonel Chance Ndagano, will be able to carry on the team's good work and see RwandAir achieve its full potential in the longrun.

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And on that very uplifting and positive note, I'd like to wish you all a fantastic week ahead and to those of you celebrating it, a happy and pleasant Easter.

Ivan Nadalet

Vice President (News)