RwandAir recently signed a memorandum of understanding for two A330 aircraft to be delivered in the second half of 2016. What is the main objective of this investment?

We are addressing a capacity issue. Our capacity on Dubai was completely circulated. With the 737, which is a narrow body, we were left with no room to carry maximum passengers and no room for cargo and baggage.

There was also demand for cargo. With Airbus wide body, you have cargo capacity beyond baggage for passengers. We also wanted to add a second trunk route onto our network.

The more we start growing into the continent, it was becoming clearer to us with the trunk route to Dubai from a capacity point of view that we are already at the maximum. But, more importantly, the business and trader market is going beyond Dubai.

Now, increasingly, traders and businesses on the continent are looking further East — to India and China. With our current fleet configuration, we have no capacity to go into those two. Already, Dubai was becoming a nightmare.

We needed more destinations that attract business — such as China and India. Our intention is to start serving those markets that contribute the highest number of tourists, for instance Europe.

How cost-effective is this business strategy of buying new planes as opposed to leasing?

We are building our balance sheet, which is the backbone of the business. Currently, we operate a fleet of seven planes — we are already leasing two. In June we will get the eighth plane, which will also be coming through on a lease.

We have five planes purchased directly from the manufacturers on our balance sheet plus the Airbus that will be delivered next year. Our next set of acquisitions will be through lease.

If one had their way, the right thing would be to buy the plane and own it, because then you are able to negotiate a very good price with the supplier or the manufacturer and after 12 years this plane will pay itself off.

All the loans that we are taking on these planes are 10 years. We cannot even get 12 years, meaning that after 10 years these planes are going to be sitting as assets on our balance sheet.

However, the ones we are leasing, after 10 years the lease life is ended, the owner will take the plane. Our fleet target is 12 planes by 2018.

Given that you are still financing your expansion using loans, accumulating a lot of debt, when is RwandAir likely to break even?

It is true we have been posting losses year after year but there is a good story in terms of the future perspective. One can see that our budget that we set for 10 years in on track.

We started from 30 per cent load factor; we are now at 60 per cent. This shows that we are efficiently deploying the assets that we have. This business will pay because it is growing — every year we get better.

We are still at expansion and growth phase — building value and capacity for the future. We are still a startup — we are trying to build value and capacity for the future.

We have been growing over the past few years. It was very difficult at the beginning, in 2010-2011, because we had no history as a business.

Our industry is very capital-intensive. There are financial institutions that understand the kind of business we are doing — they look at how we have been growing.

When are you likely to begin long-haul flights?

They will start in the first quarter of 2017 because the second aircraft will get here towards the end of next year. The first one that comes next year...we will use it to add capacity on Dubai (route) to clear the backlog. We are targeting Western Europe — London (the United Kingdom), Germany, France — this is where the bulk of tourists come from other than the US.

But the US would be a stretch for us, especially since we don’t have enough aircraft.

Ethiopian Airlines has expressed an interest in buying a stake in RwandAir. When is the privatisation likely to happen?

We have been engaging strategic investors to take an equity stake in RwandAir and the negotiations are going on. We have engaged some three interested stakeholders within and outside the region. The process is on.

Going forward, what is your network development strategy?

We are still tracking what we had in our business plan. Today, we are serving 18 destinations — we see that growing in the next three years, to about 25 by 2018. We have already plotted those that will be serving — probably this year we will take on a few more, and next year too.

Now, with the introduction of the Airbus in 2016, we will definitely have those destinations up and running in time to start feeding into the many seats that we are adding into our network.

We recently launched Lusaka (Zambia) — RwandAir was granted 5th freedom rights in Lusaka. Now we are looking for the same in Harare (Zimbabwe).

In 2015, what are the prospects and risks to your business plan?

We hope the increase in oil prices does not go beyond where it is — this will give us a relief. We want to continue growing in terms of passenger numbers and destinations. We want to prepare for the delivery of wide body aircrafts.

In 2016, we will be introducing wide bodies on our network and cargo. We are also preparing for the next International Air Transport Association (IATA) operational safety audit (IOSA).

What risks do you foresee in the industry?

The impact of the xenophobic attacks in South Africa, no doubt.

For the last two weeks when all this started, we saw a significant drop, especially since we were getting a lot of travellers from Central Africa going through Kigali to Johannesburg. The numbers have dropped — you cannot go to a country where they are hunting down fellow human beings.

What is happening today in Burundi is going to affect us. The people who go to Bujumbura to do business everyday or stay and come back, these people are not going there because of the current tension and crisis.

We will see a dip, there is no doubt, in the number of people who have been flying from Kigali to Bujumbura everyday for business.