RwandAir Explores Fifth Freedom Network Opportunities

Fast-expanding African carrier RwandAir is setting its sights on markets across the entire African continent rather than simply feeding traffic into its Kigali International Airport base as part of its network development model.  The airline’s senior management team believes there are numerous opportunities to provide point-to-point services within Africa as well as outside the continent, particularly markets such as the Gulf States and the wider Middle East.

The first stage of this revised model has seen RwandAir announce its intention to operate flights between Dubai, a market it already serves on a daily from its Kigali base, and the Kenyan coastal city of Mombasa.  The carrier plans to introduce a three times weekly link from February 1, 2013 using a Boeing 737-800.

RwandAir will be the only carrier providing flights between Mombasa and Dubai, a route that it previously served on a triangle basis with its flights between Kigali and Dubai, but which was stopped in October 2012 when it started to fly non-stop to and from the United Arab Emirates (UAE) from the Rwandan capital.  Before that Kenya Airways had provided weekly flights between May 1984 and April 1987 using a Boeing 707.    In 2011, an estimated 30,000 bi-directional O&D passengers flew between Mombasa and Dubai, up 92.4 per cent on the previous calendar year.  RwandAir had an estimated 70 per cent share of this traffic with the rest of the passengers connecting via East Africa’s main hubs in Addis Ababa and Nairobi.

RwandAir witnessed strong growth in 2012 as two new Bombardier CRJ900s delivered in October 2012 enabled it to boost its regional activities.  “The year 2012 was very successful for us as we saw strong growth in revenue and passengers numbers”, said Bert van der Stege, Commercial Director, RwandAir at an event in Kigali to reveal its latest expansion plans.  “By re-designing schedules, focusing on connectivity, improvements in sales & marketing and by offering additional points to sell via the hub Kigali, RwandAir has now become a serious player in the region,” he added.

The airline is now understood to be looking to replace its older Boeing 737-500s which are due to return to GECAS at the end of their leases this year with two second-hand 737-700s from ILFC as its fleet renewal continues.  The two more modern aircraft, with their improved efficiency and increased range could bring new network opportunities to the carrier.

“Beyond pure point-to-point traffic and our hub development in Kigali, we’re also looking at 5th freedom opportunities,” explained van der Stege.  In an exclusive interview with The HUB, van der Stege explained that RwandAir was considering 5th freedom routes for two main reasons in that they provide positive growth with only limited additional costs (revenue versus costs per seat are very attractive) and because they fit well into the business model of a small national airline like RwandAir. 

“As an airline with only seven aircraft, we can't serve every destination that we'd like to connect to our network.  We have more than seven destinations that we would want to connect and even if we'd serve all our destinations as triangle flights, we would still not be able to connect everything properly,” said van der Stege.

A 5th freedom opportunity is a good solution, especially if it involves a good or strong O&D market, such as Mombasa - Dubai.  There is no need to send a regional jet there to feed our hub as the costs of getting the passengers to Kigali are just too much and it simply would not be a sustainable option for us.  5th freedom opportunities provide a good solution in these cases,” he added.

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