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RwandAir flies through turbulent aviation business

Friday October 02 2015
rwandair

RwandAir CEO John Mirenge. PHOTO | FILE

In 2010 when you took over management of the airline, what sort of company did you inherit?

It was fairly a small company but the seeds of the current airline were sown because the government decided to invest in the industry. By then, the orders for the first Boeing 737-800 had been already made.

We are much bigger today with eight new carriers already in operation and four more that have been ordered. We currently employ in excess of 700 employees, were are in 18 destinations and more are to come.

We carry a half a million passengers a year compared with previous years and members of IATA. Things look bright and we are on the right direction.

How much has this cost you?

The investment has been phased but the ballpark figure is about half a billion dollars overall. Jet fuel tops the list, consuming up to 40-50 per cent of the turnover followed closely by paying the staff who are experts in high level operations as they are sourced from around the world.

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To what extent have you moved towards having an airline that employs Rwandans in key positions?

To be clear, unlike other industries where you can find quick fix employees, airlines rely on experts as there are a lot at stake, especially the lives of those on board. We take our time and train the best for them to be at par with required standards. The process started in 2010.

So far we have 19 Rwandan flying planes, two of them who are pilots in command commonly referred to as captains, 17 first officers at different levels but flying and close to 20 taking their initial training in Ethiopia and will join our staff in the course of this year and next year.

We are gender sensitive so we have a young lady flying planes and six others that are on training, we also have six rated technical experts who are already flying and 15 who are undergoing on job training and 25 taking engineering training in Ethiopia and Sri Lanka.

We also put out an advertisement for the aircraft engineering field looking for young people. It is a process and we cannot hurry it, so for now, we will still depend on expatriates for the safety of our clients as we perfect the skills of our own.

Which is your best performing route?

Averagely, we do very well with routes in Central Africa and West Africa. We have challenges where the routes are extremely competitive such as Nairobi and Dubai who have local entrants. Again we still count on our esteemed clients that have over the years supported our product and grown in numbers.

When we look at the passenger traffic, you talked about the growth, how much is it is generated from Rwandans?

Currently we stand at 40 per cent as purely transit product; the remaining 60 per cent traffic that is inbound to and from Rwanda. The number of non-Rwandans is, however, higher than that of purely Rwandans that we carry.

What sort of passengers are we looking at here, is it business or is it tourists?

It’s a whole mix. Out of Rwanda and across Africa, I would classify those that transit to be business travellers but those bound to Rwanda are majorly tourists and conference attendees and then quite a bit, lots of East African travellers who used to go by bus are now opting to fly as it is quicker, safer and cost friendly fares.

Please give us the biggest challenge in this investment phase, cost of fuel aside?

I would say, as a startup — skills gap. Having to rely on expatriates, people you have no control over. Aviation was not our kind of field in this country.
So, right skills in right areas is still a challenge, but we are working on getting there. The other, is the protectionism across the continent by governments.

To what extent does the protectionism by the big wigs across the region undermine your business plan?

Basically, most of the African states are signatories to the Yamoussoukro decision, which practically opens air space to all African operators with unlimited frequencies and rights, but unfortunately that is not the case on the ground.

As a young airline, our strategy was and has been to curve a niche to the unfrequented areas that the bigwigs were yet to serve as we require few passengers of 30-50 with ease and limited costs while they require more people.

To us it would be enough but every time we tried to approach some of those authorities in such markets we have been blocked and delayed.

Africa amazes. At times some of them block us without even an operator or an alternative. They just block you and stall you, making it difficult for those of us who would flourish so well in such air spaces. This has been a challenge that we have vocalized to the African Union.

Before we get to the African Union, closer in the East African region and in Kenya more recently, we are all aware that RwandAir had troubles getting into the Kenyan market. If the East African region itself cannot get it right, why would anybody hope that the AU will come in and resolve the issue?

Well this is a problem no doubt, but since it is played out in the political level and I think it is being handled at that level and we hope it gets cleared out soon. The good news is that top leadership of the East African Community are committed to one day seeing an East African Community that has open skies…

We have seen your interests in the region do you have plans to go beyond?

We are working on flying to other Western African states and other cities such as Khartoum; out of Africa we have our eyes on China, India and even Europe. Tourism and the convention centres are giving contributions from across the globe.