Ethiopian and RwandAir to finalize a partnership deal

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Ethiopian Airlines (ET, Addis Ababa) management have expressed an interest in partnering RwandAir (WB, Kigali), which is currently scouting for strategic partners capable of accelerating its already rapid growth.

Earlier in 2016 RwandAir, the national flag carrier of Rwanda, selected Ethiopian Airlines as its future strategic partner. It is even said that both airlines have technical and commercial cooperation agreements.

To bring an update to this partnership, one of the RwandAir official told this week that “Both airlines are still discussing the details of the partnership and they will update the media and public once this stage has been concluded.

Quoting unnamed sources in the carrier’s management, Ethiopia’s Reporter newspaper says Ethiopian Airlines sent a delegation to Kigali to sound out RwandAir and Rwandan government officials about a possible tie-up in July last year. While Ethiopian CEO Tewolde Gebremariam confirmed the talks, but he did not comment on their progress.

The Rwandan government  hired Ernst & Young to draft a turnaround strategy for its national carrier which, despite strong growth under the mantle of maverick CEO John Mirenge, has yet to turn a profit.

Last week, RwandaAir announced they will start flights to Mumbai, India this year. John Mirenge, CEO of RwandAir said the airliner will start operating four flights to Mumbai flying its brand new A330-300 aircraft.

He said the national carrier has already appointed India’s Bird Travel as the general sales agent as it prepares to launch the route.

Mirenge revealed “We want Bird Travel to position our brand by creating awareness about our products and services in this market,”

The two airlines established a joint team last year in October that is working on the details of the formation of the strategic partnership Mirenge told the Reporter last year.

“The joint team is working on the details on a permanent basis. Strategic partnership is like marriage. If you rash it, it might not last too long.”

“Or it could go over a span of years while every partner is studying and trying to understand the other better. I think that is where we are. We chose that path,” Mirenge said.

The CEO quoted to have said that the two sides will continue working together and look at each other more carefully. “We need to understand each other’s way of doing things, and grow organically from the kind of partnership we already have.

Ethiopian supports us technically. They train our pilots; they train our technicians and engineers. We already are in a relationship. Over time we need to grow to strategic partnership,” he told The Reporter.

The Reporter further reveals that the joint team is looking at the possibility that Ethiopian will invest in RwandAir and have a 49 stake on the airline. It will be represented in the board and management and continue providing technical services.

Ethiopian Airlines Group CEO Tewolde Gebremariam is also reported to have said that the two airlines are already cooperating in various fields.

“We have technical and commercial cooperation. We have a code share agreement,”

The CEO said that currently the two sides are working on the details of the strategic partnership.

“We have our own business strategy and they have their own. The joint team has to look at the business strategies and possible ways of synchronizing them.”

The carriers in principle agreed to forge a strategic partnership in January 2016. The joint team is working on all modalities and the rest of the details are to come out of the ongoing negotiations.

And Kigali will be Ethiopia’s fourth hub after its main hub in Addis Ababa, Lome and Lilongwe.  As part of the 15-year development roadmap Vision 2025 Ethiopian is implementing a multi-hub strategy in Africa.

For its part, Ethiopian is currently looking for a suitable site for its planned Central African hub which, at one stage, was likely to have been set up in Kinshasa N’Djili in partnership with the Congolese authorities.

However, Kinshasa’s decision to align itself with Air France (AF, Paris CDG) for its Congo Airways (8Z, Kinshasa N’Djili) venture has poured cold water on those plans.

Ethiopian has also been linked to a South Sudanese carrier in which it will partner that country’s government in establishing an airline that will initially focus on domestic operations before expanding regionally.

Based in Kigali, RwandAir is a fast-growing airline in East Central Africa. The Rwandese government established RwandAir in 2009.

The airline serves 16 domestic and international destinations with eight aircraft – two Bombardier Q400, two Bombardier CRJ900, Boeing B737-700 and B737-800.

In September last year, RwandAir took delivery of its first wide-body modern aircraft Airbus A330-200. The aircraft has 244 seats – 20 business classes, 21 premium economies – a new product in Africa-203 economy class seats.  In November last year it received the second A330 aircraft direct from Airbus.

Since the country is landlocked, the government is paying due attention to air transport development. Government is transforming the aviation, tourism, and ICT sectors.

Works on the building of a new Rwanda international main airport; 50 km in Nyamata Bugesera at a cost of US$ 600 million dollars  and construction is said to begin in June 2017 and to be completed in December 2018.


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