Qatar Airways has signed an agreement to take a 60% stake in Rwanda’s new Bugesera International Airport in a deal believed to be worth $780m. The airport is set to have an annual capacity of 14m passengers, double that of Nairobi’s international airport and two thirds of the new flagship Bole airport in Addis Ababa.
Bugesera International Airport is 25km southeast of the capital Kigali. The upgrading project, which actually began in 2016, is set to be completed in two phases. It comes after Portuguese engineering company Mota-Engil left the project in 2018 amid new plans to almost double capacity. Phase 1 will see capacity increased to 7m passengers annually, up from the planned 4.5m. It is due for completion in 2020. Phase 2 will see capacity double to 14m in 2032. Kigali airport handled 977,631 passengers in 2018.
The Qatari government, which owns Qatar Airways, is also looking at an investment in RwandAir, Rwanda’s state owned airline. Clare Akamanzi, executive director of the Rwanda Development Board (RDB) has said,
“We hope that our future airport hub will boost tourism, allowing us to increase our revenues from $150m to $800m in seven years. Bugesera will be a key employer, the aviation sector will need to employ many people to serve the maintenance, cargo, and our company RwandAir.”
RwandAir has been seeking category one status that would enable it to fly directly to the US. Qatar Airways would use Kigali as its East African regional hub, a move that would cuts costs given that it has to cover longer distances to Doha following an air blockade by other GCC countries. Certainly, it is clear that there is little point expanding the airport so aggressively without also investing in the national airline.
The investment a major step change for Rwanda, which is seeking to challenge Kenya and Ethiopia to become the leading airport hub in East Africa.
Jomo Kenyatta International Airport in Nairobi has a capacity of 7.5m passengers annually with the addition of a new terminal. It handled 7,039,175 passengers in 2018. There are existing proposals for it to increase capacity to 18.5m passengers annually by 2030.
Addis Ababa’s flagship Bole International Airport can now accommodate up to 22m passengers a year. To out this in context, Johannesburg’s OR Tambo currently handles around 17m passengers annually. Ethiopian Airlines Group has said it would consider buying a stake in South African Airways, which has been lossmaking since 2011, if it comes up for sale.
Rwanda’s ambition to be a transport hub needs to be seen in the wider context of its government’s ambition to become the “Singapore of Africa”. Rwanda plans to have universal electricity access by 2024. It has a decade old programme to roll out fast, free internet access. It is one of the most business-friendly countries in Africa – ranked second in Africa after Mauritius and scoring higher on the World Bank’s Doing Business Rankings than the Netherlands or Belgium. It is home to a high profile Volkswagen car assembly plant, despite being landlocked and poorly connected with container ports. As with Singapore, Rwanda positioning itself as a gateway to the continent.
Its bet with Qatar might also prove highly astute: there are growing signs that the GCC may thaw relations with Qatar, making its airline more competitive with longtime rival Emirates. For all the talk of passenger numbers it is worth noting that in terms of scheduled freight tonne kilometres, Qatar Airways Cargo is actually the third largest carrier – larger than UPS’s air freight carrier and any Chinese air freight carrier.
