Qatar Airways will take a 60 percent stake in a new Sh131 billion airport to be built in Rwanda and which is set to rival Kenya’s Jomo Kenyatta International Airport (JKIA) as the main regional aviation hub.
The move follows a deal between Kigali and Doha, which will see the Qatari government invest in the airport located outside Kigali that will ultimately handle 14 million passengers annually, double JKIA’s current capacity.
The partnership, likely to be closely watched by the struggling Kenya Airways #ticker:KQ, will involve building, owning, and operating the new Bugesera International Airport as it seeks to expand its capacity, initially to seven million passengers a year.
“The agreements signed today mark a key milestone in the development of Rwanda’s vibrant aviation sector, in the context of the excellent bilateral relationship between Qatar and Rwanda,” said the statement. “The new airport is being redesigned to accommodate seven million passengers per year, with a second phase for 14 million passengers a year expected to start by 2032”.
According to economist Toni Watima, JKIA will now have to strategise and align itself with developments going on in the region if it is to maintain its competitive edge as a leading aviation hub.
“JKIA remains a major hub, but that depends on how it will reinvent itself to maintain its competitive edge,” he said.
One of JKIA’s advantages is that many multinational businesses, international agencies and non-governmental organisations have their regional headquarters in Nairobi.
This week, the capital was ranked by international civil servants and expatriates as the best city to work in Africa, ahead of Johannesburg, Cape Town and Lagos.
Nairobi is also preferred as a hub for cargo and analysts have opined that the Kenya Airports Authority should look for a strategic partner to revamp the cargo wing.
At Sh131 billion, Kigali’s proposed airport will be more than double the investment that Kenya would have invested in the now cancelled Green Field Terminal at the JKIA, which was meant to strengthen the country’s position as the leading aviation hub in the region.
Transport Secretary James Macharia cancelled the Green Field Terminal in 2016, saying there was no value for money and that the existing capacity was enough to handle an increase in the number of passengers.
At the moment, JKIA has a passenger capacity of 7.5 million following the renovation of its two terminals. The airport handles 6.5 million passengers annually.
Rwanda has been seeking category one status to enable its national carrier, RwandAir, to fly directly to the US and it is likely that with the new investment, this will increase its chances of getting the approval.
This means that Qatar Airways would use the airport as its East African regional hub where it can connect passengers to other destinations such the US and Europe, without necessarily having to fly back to Doha as is the case now.
Unconfirmed reports indicate that Qatar Airways is keen on operating some of its flights from Kigali, a move that will save the carrier operational costs given that it has to cover longer distances to Doha following an air blockade by four Middle-East countries.
The move will pile pressure on regional carriers, including Kenya Airways, which might have to cut their prices to remain competitive in the market, considering that most of the Middle-Eastern carriers, such as Qatar, are highly-subsidised.
Bugesera will be the country’s third international airport after Kigali International Airport and Kamembe International Airport in western Rwanda.
Countries in the region have in recent years been expanding their aviation sector.
Ethiopia and Tanzania have been expanding airports, whereas Kenya seems to have stopped further expansion of its own main port of entry. Uganda Airlines has also revamped its operations as has RwandaAir.