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Inspite of a troubled history; Air Rwanda is flying on course

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by ByaseL, Jul 15, 2010.

  1. B

    ByaseL JF-Expert Member

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    Jul 15, 2010
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    As the sages say- if the grass is greener on the other side of the fence be aware that the water bill is also higher! When Rwandair Express popularly known as Air Rwanda made its maiden flight to Dar es Salaam recently there was some hullabaloo in a section of the press for the “apparent” new kid on the block. Unknown to many, the airline has been flying to Kilimanjaro International Airport (KIA) since 2009. For two consecutive days internet bloggers at the Jamiiforums blog site were excited like kids in a candy store, ecstatically commenting on Air Rwanda with many making an analogy between the Rwandan national airline and our own ailing Air Tanzania. Why should Air Rwanda, for example, with a relatively small market base seem to succeed while Air Tanzania with a sizable market to boot, has been a serial failure? Queried some bloggers.

    Air Rwanda, like its mother country, has a bit of a chequered history. Société Nationale des Transports Aériens du Rwanda or Air Rwanda was founded in 1975 as a wholly government funded national airline of the Republic of Rwanda. With a fleet of One Boeing 707, two De Havilland DHC-6 Twin Otters, and one Piper Aztec the airline was able to operate both scheduled Passenger and cargo services to domestic points and neighboring countries to Uganda, Zaire ( now DRC), Burundi and Tanzania. The B707 was mainly used to operate scheduled cargo services to Mombasa, KenyaOstend in Belgium. At one time when USA and Libya relations were at a low point, Air Rwanda was implicated in a secretive deal where Libyan Arab Airlines was trying to skirt a USA and embargo to get access to aircraft spare parts but quickly jumped out of the talks. This of course did not impress the Americans.

    Enter the 1994 Rwandan Genocide and it become impossible to operate domestically with EntebbeBujumbura remaining the only destinations on its network. In 1996 under the new regime of the Rwanda Patriotic Front, the airline changed name to Rwanda Air but basically nothing changed just like the proverbial old wine in a new bottle. At that time Rwanda was coming out of a horrendous socio-economic and political quandary so the airline was obviously not amongst top priorities.

    In 1997 the Rwandese Government assented to the instruments establishing the African Joint Air Services (AJAS) trading as Alliance Air, a Uganda-based joint regional airline of Uganda, Tanzania, Rwanda entered into a deal to form Alliance Express in lieu of Rwanda Air with the government holding 51% while Alliance Air the remaining 49%. Readers may excuse me for being nostalgic about Alliance Express because I was amongst those deeply involved in its creation. But I digress! The airline launched operations in February 1999 concentrating only on regional services to Bujumbura, Nairobi and Entebbe using a leased Bombardier Dash-8 aircraft.

    In a way, Alliance Express hit the ground running because by capitalizing on the synergies of both SAA and Alliance Air, it was able to quickly gain some territory in the marketplace. By using Alliance Air’s two letter code “Y2” and SAA ticketing code, Alliance Express was able to piggyback on Alliance Air’ interline agreements with other international carriers, exploit SAA’s brand perceptual linkage and enjoy the group’s impeccable on-board services . These are powerful sales and marketing tools for a nascent airline.

    However, there was a snag when it came to the Kigali-Johannesburg operations which put a damper on the airline’s corporate plan. These services were premised on the assumption that because of the strong political rapport between Rwanda and the Democratic Republic of Congo (DRC) at that time, Alliance Express could easily be allowed to exercise fifth freedom traffic rights between Johannesburg and Lubumbashi. This implies Alliance Express carrying traffic between these two cities. There is sizable high yield traffic between Lubumbashi and Johannesburg which Alliance Express assumed would be granted and could make a resounding impact on the airline’s bottom-line. However, this was not to be because DRC didn’t budge on this bilateral issue. Meanwhile, the Second Congo War ensued, turning former comrades- in- arms into bitter foes thus totally negating any form of aero-political cooperation between Rwanda and DRC. To shorten the story, the twice weekly direct Kigali-Johannesburg (without Lubumbashi) using a B737-200 proved quiet onerous on the airline’s meager resources.

    With the demise of Alliance Air in October 2000 due to squabbling amongst shareholders, the Rwandese Government entered into a side agreement with SAA to continue giving Alliance Express commercial support to go on operating until the airline was wound up in 2002 and in its place Rwanda Express (WB) was born.

    Since then there has been no looking back for the Rwandese Government. As a sole shareholder in Rwanda Express, it has been putting its money where its mouth is. There is no paying lip-service for President Kagame’s regime when it comes to national priorities. As a landlocked country RwandaRwanda is now a serious contender boasting of 2 CRJ, 1 Dash 8 and 1 B737-500 aircraft. It has twelve weekly flights to Nairobi competing head-on with the mighty Kenya Airways, nineteen weekly flights to Entebbe shared between the CRJ and DH8 aircraft tussling it out with Air Uganda, six weekly flights to Johannesburg, ten flights to Bujumbura, four flights to KIA and three weekly flights to Dar Es Salaam. Not a mean achievement for an airline which is barely a decade old.

    According to Mr. Fred Obbo, Managing Partner of Fredrick, Francis & Associates of Kampala, the phenomenal success of Air Rwanda can be attributed to the following key factors;

    The Rwandese Government under a visionary President Kagame has prioritized the aviation sector as one of the drivers of the regeneration of Rwanda’s socio-economic development with an emphasis on tourism revival. Tourism was a leading foreign exchange earner at $ 195 million in 2009. Adequate and timely resources are being availed to the airline to painstakingly fulfill the shareholders mission.

    The hard-nosed anti-corruption and accountability crusade embarked upon by the Kigali regime across the board is slowly but surely beginning to pay off. Government leaders and executives of various parastatal companies are strictly selected on merit and held accountable for their actions. “This has inculcated a sense of work discipline, diligence and frugality amongst leaders and executives in whatever they do which is crucial to success” says Mr. Obbo.

    And finally, the piece and tranquility currently prevailing in Rwanda has created investor confidence in the country, so as the economy gradually takes off, the national airline is capitalizing on this windfall to fly on course.


    To my fellow internet bloggers at Jamiiforums: the greener grass that we admire on the other side of the fence is because someone is paying a higher water bill.

    Byase Luteke
     
  2. Ruge Opinion

    Ruge Opinion JF-Expert Member

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    Jul 16, 2010
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    Well and good. But it could be a political airline. Have you seen its financials? Share them with us if you have. Until then, I say the jury is still out.
     
  3. babukijana

    babukijana JF-Expert Member

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    Jul 16, 2010
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    ok and remember francis whos namely there is the one suspected and arrested on shooting of general in south afrika,and after bail he dissapear
     
  4. RRONDO

    RRONDO JF-Expert Member

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    Jul 17, 2010
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    wow.....
     
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