With a number of recent developments, Qatar Airways is demonstrating that it’s ready to take on competition from Ethiopian Airlines in Africa. The Middle Eastern carrier hopes that a new airport venture and a stake in numerous airlines will boost its presence and profitability in the region.
How will Qatar Airways challenge Ethiopian Airlines?
Qatar Airways is lining itself up with a number of African ventures in the coming months and years. The airline recently signed an agreement to take a majority stake in a new airport in Rwanda. What’s more, it’s also expressed an interest in two African carriers: RwandAir and Royal Air Maroc.
If it goes ahead with these airline ventures in addition to the airport stake, Qatar Airways will be putting itself in direct competition with airlines that already operate on the continent. Namely, this will be Ethiopian Airlines.
Ethiopian Airlines already occupies many routes throughout Africa. In fact, with 61 cities served, it offers more destinations in Africa than any other airline in the world. That’s some tough competition for Qatar Airways to match up to.
So why does it want to invest in Africa?
Well, on 5th February 2020 at the CAPA Qatar Aviation conference, Qatar Airways spoke of the opportunity it would gain from investment in Africa. According to Bloomberg, the CEO of Qatar Airways, Akbar Al Baker, said:“…we see that Africa is another region that has huge growth potential.”
Needless to say that Africa is a great place for Qatar Airways to be. However, alone it would find it very difficult to operate. The airline is hampered by an airspace ban which makes flying to Africa problematic.
In June 2017, a blockade was placed by four Middle Eastern countries preventing Qatar Airways from operating within their airspace. The Qatari air carrier is prohibited from flying over Saudi Arabia, the UAE, Bahrain, and Egypt in the interest of national security in those countries. At the time, this sent a shockwave through the country who had previously believed the neighboring countries to be friends. Despite this, the CEO of Qatar Airways believes that the exclusion has helped the airline develop resistance and strength. That said, for future routes, a RwandAir or Royal Air Maroc stake will make navigating the blockade a little bit easier.
Operating within Africa would then become a lot easier for Qatar Airways. As a result, it allows the airline to effectively compete against Ethiopian Airlines. What’s more, with the investment in Rwanda’s Bugesara International Airport, Qatar Airways will have more jurisdiction about how its operations work in Africa.
That said, Ethiopian Airlines is not without a gameplan. It too holds a vested interest in African routes. However, unlike Qatar Airways or RwandAir, it already has a robust African offering and does not have any of the airspace restrictions that Qatar Airways does.
In addition, it’s funding a mega airport in Addis Ababa which will facilitate its expansion plans. This could present a threat for Qatar Airways who might be a few steps behind the mark when it comes to African expansion.
Will Qatar manage to topple Ethiopian in Africa?
Whilst Ethiopian Airlines certainly seems to have the edge on the Qatari airline, that’s not to say that all of its hopes are in vain. In fact, it has a lot going for it. Firstly, it already owns a more extensive route network in comparison to Ethiopian with 54 additional services. That already allows it the benefit of serving passengers arriving at and transiting through Africa.
On top of this, the geographical location might have some bearing on the success of Qatar Airways’ African venture. If it takes a stake in RwandAir, it will be in a good position to serve countries within Africa. However, since the country is located in the center of Africa, expanding to international destinations might be more problematic.
But then, if Qatar Airways took a stake in both RwandAir and Royal Air Maroc it will have covered its bases since Morrocco is on the upper west side of Africa. Whilst not quite in the middle, the two airlines would allow Qatar Airways better flexibility with its route network.
However, Ethiopian Airlines is on a trajectory of rapid growth which will see it outgrow its current airport base and diversify its network. Ethiopia is also well located, similar to the Middle East, in the center of the globe. That makes it that bit easier to access all parts of the world.
Also, in making its dream of an African operation very effective, Qatar Airways recently acquired 49% stake in Rwanda Air, one of the African carriers it hope to partner with in the continent.
According to atqnews.com, the move is the fruition of bilateral talks held between both countries’ leaders last year in Kigali.
The Amir Sheikh Tamim bin Hamad Al Thani of Qatar arrived in Kigali late last year to meet President Kagame for bilateral talks.
The two leaders had a Tête-à-Tête and later witnessed signing of four agreements in sectors of culture, sports, tourism and business events and aviation travel and logistics and ending the day with a State Dinner.
The Amir was welcomed by President Paul Kagame at Kigali International Airport.
The holding being negotiated will be its first in the continent after a string of deals elsewhere.
Qatar Airways agreed in December to acquire a 60% stake in Rwanda’s new Bugesera International Airport, located south of the capital Kigali, where an existing hub is at full capacity. As part of the deal, the Gulf carrier will help build and run the $1.3 billion facility.