RwandAir targets $350m sales by 2018
- RwandAir plans to double its fleet from the current seven aircraft to 15.
National carrier RwandAir is expected to rake in Rwf222 billion ($350 million) in revenues in the next five years, as the government positions it to be one of the drivers of the country’s service industry.
Currently, the airline, which is still surviving on taxpayer’s money, makes Rwf30 billion ($47.2 million) annually.
This amount is not enough to offset its operating expenses in the competitive aviation industry.
The industry is seen to have the potential to steer the country to middle income status by 2017, by helping the economy weather budgetary shocks as donor funding becomes unpredictable.
“We shall continue supporting RwandAir in our budget,” said Finance and Economic Planning Minister Clever Gatete, in a phone interview.
“[But] you should not look at RwandAir alone. RwandAir is part of the package needed to turn the economy to one that is service industry driven. We are expanding the airport to handle more traffic. When traffic increases, the hotel and tourism sector will boom,” said Mr Gatete.
The service industry contributes 55 per cent to the country’s GDP. The five-year programme to turn around the national carrier involves network and fleet expansion.
RwandAir plans to double its fleet from the current seven aircraft to 15.
According to a draft Economic Development and Poverty Reduction Strategy (EDPRS), this will involve increasing the seven narrow bodied aircraft to 12 to be deployed on regional routes and adding another three wide-bodied aircraft for long distance travels.
Currently, the airline serves the East African Community capitals with daily flights and flies to Johannesburg and Dubai three times a week.
Kigali International Airport has been receiving an average 3,000 passengers per day over the past five years.
“RwandAir expects to grow passenger numbers to 1.2 million this year, but we plan to surpass that target by 2015. We want the airport to become one of the busiest hubs in sub-Saharan Africa,” the minister said.
Recently, the airline acquired two Boeing 737-700NG aircraft to boost its fleet, bringing the number of next generation series to four. They replace two Boeing 737-500.
The first of the two new aircraft is expected in the country early April and the second one in May.
RwandAir also plans to open new destinations to Accra in Ghana and Douala in Cameroon, making them its 14th and 15th destinations respectively.
“Recently, we introduced flights to Lagos in Nigeria, Libreville in Gabon and to Brazzaville in the Republic of Congo,” John Mirenge, CEO RwandAir said.
Other destinations the airline flies to are Nairobi, Entebbe, Mombasa, Bujumbura, Dar es Salaam, Kilimanjaro, Johannesburg and Dubai.
“We have code share agreements with SN Brussels on the Kigali-Brussels sector and Ethiopian Airlines on the Kigali-Addis Ababa Sector,” said Mr Mirenge.
The government’s continued pumping of money into the airline for almost a decade now is part of a larger programme to increase Rwanda’s external connectivity in the next five years.
“Increased connectivity will support Rwanda’s tourism sector and improve the country’s business environment,” according to the second draft EDPRS II.
Phase one of the Bugesera airport to be developed by the private sector is expected to cost more than $600m billion. If it takes off, the Bugesera airport project will be the single largest investment in Rwanda’s history.