By David Onjili
The coquetry between President Paul Kagame and the Emir of Qatar, His Highness Sheikh Tamin Bin Hamad is now bearing fruits. In April, Sheikh Tamin visited Rwanda, and his delegation alongside that of his hosts held bilateral talks on economic cooperation between their respective nations.
The climax was the signing of three bilateral agreements: a Reciprocal Promotion of Investments, another on Air travel and services and a Memorandum of Understanding on Economic, Technical and Commercial Cooperation.
In late October Kagame was hosted in Doha during the Information Technology Conference and Exhibition facilitated by the Qatar Ministry of Transport and Communication.
The Visa-free agreement between Qatar and Rwanda was struck here. Under it, Rwandese can be granted a 30-day visa waiver upon arrival in Qatar. However, they must fulfil certain conditions that include but are not limited to the passenger’s passport being valid for at least 6 months, and they must possess a confirmed return ticket and hotel reservation too.
Aviation the big beneficiary
The 2017 Gulf crisis still lingers over the Qatar government. The state run Qatar Airways cannot fly to Dubai, Saudi Arabia, United Arab Emirates and Bahrain, thus shunting Qatar Airways from some of its key markets.
The African market accordingly postures to them as an interesting business proposition. Consequently, the bilateral relations with Rwanda, whose airline has not been making any profits, makes good business sense. On its part, Rwanda wants to make Kigali the hub for Africa’s aviation travel for both tourists and business travelers.
In 2016, RwandAir was sunk deep in loss making, at $54.8m, before the government pumped in some $53.8m to bail it out. These figures are provided by David Himbara, a Professor of International Development and based in Toronto, Canada. The general financial status of the airline is uninspiring and by having Qatar Airlines as partner, then some cushioning will happen to the airline. In the deal, RwandAir will benefit from technical support for its engineers and crew in form of training.
Leasing of aircraft is big business for major airlines as they avail to new airlines, airplanes and even offer maintenance services to them at fairer rates.
Qatar Airways, which owns 204 airplanes as per their website and flies to over 160 destinations across the 6 continents, needs to maximise on their utility. Having such a number and not flying them is expensive in terms of parking and maintenance costs. This is why their partnership with an emerging airline like RwandAir, which owns 12 aircraft, makes sense. Leasing of aircraft is big business for major airlines as they avail to new airlines, airplanes and even offer maintenance services to them at fairer rates. This in-turn saves the latter from the astronomical investment needed to purchase a new airplane. The estimated cost of a brand new Airbus A320 is $1010 million and that of a Boeing B737 Max is $74m.
Qatar’s government will also help finance the development and completion of Bugesera Airport. Construction which started in August 2017 is envisaged to end by the 2020 deadline. The new airport should have a capacity of 1.7 million passengers, while the construction contract was entered by MOTA ENGIL AFRICA who are 100 percent expected to deliver on it. This is all part of Kagame’s grand plan to make Rwanda not just an international conference hub but an aviation hub on the continent.
Should Nairobi and Kenya Airways (KQ) be worried?