RwandAir looks to spread wings; will add European destination, four aircraft this year

Plans to carry a record 1 million passengers by 2017 as it boosts the size of its fleet

RWANDAIR, the state-run Rwandan airline, plans to add a European destination this year and carry a record 1 million passengers by 2017 as it boosts the size of its fleet.

The carrier is considering flying to either London, Paris or Frankfurt by the end of 2016, depending on which country it can obtain permission from first, Chief Executive Officer John Mirenge said in an interview in the capital, Kigali. It handled 600,000 passengers in 2015, up from 500,000 a year earlier, he said.

The airline is expanding its fleet as it adds routes, eyeing cities in Ivory Coast, Sudan, Mali, Benin, Zimbabwe and Malawi along with Guangzhou in China and India’s Mumbai. It will take delivery of an Airbus aircraft in September and another in December, which were financed with a $160 million loan from the Eastern and Southern African Trade and Development Bank, and plans to lease two Boeing Co. planes this year, said Mirenge.

RwandAir plans to “serve markets that we never thought would be covered” while forming partnerships, including with Ethiopian Airlines Enterprise, to reach more customers, he said.

The company’s load factor—the number of miles flown by passengers as a proportion of available seat miles—is too low at about 60% and the goal is to increase it to 75% to 80%, said Mirenge. “We are not yet at optimal utilisation,” he said.

Tourism Industry

An idea considered in recent years to sell shares in the company to private investors has been shelved until the company stops operating at a loss, said Mirenge. The government, which owns 99% of RwandAir, is willing to wait for the initial public offering because it sees the airline as a valuable way to develop the country’s tourism industry, he said. One of the nation’s biggest draws for overseas holidaymakers is tours to see endangered mountain gorillas.

“The airline business is capital intensive, and the airline is still in this phase, still deploying heavy capital to reach and grow market share,” Mirenge said. “It’s going to take a bit of time to break even.”

The airline, founded 14 years ago, currently has two Boeing 737-800NGs, two Bombardier Inc. Q-400s, two Bombardier CRJ-900s and two Boeing 737-700NGs, according to the company’s website.     

-Bloomberg         

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