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RwandAir Shifts Focus To Cargo Business

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RwandAir has recently stepped up the hunt for cargo deals across the region and globe as the only way to survive the wrath of #Covid-19 which has forced grounding of airlines worldwide.

Over reliance on passenger model has evidently hit hard the national carrier and is now thinking outside the box.

Last month, RwandAir started operating international cargo flights to Brussels, London and Guangzhou.

Yvonne Manzi Makolo RwandAir CEO says, “We’re doing cargo flights to Brussels and London to support our exports. We’re also going to Guangzhou to pick up medical supplies and equipment needed in Rwanda.”

Those watching closely say that the new move is part of preparations of receiving yet another round of financial support from government according to a recovery plan seen by Taarifa.

Government says the newly created #Covid-19 economic recovery fund aims at, “supporting businesses in the sector hit hardest by the pandemic so that they can survive, resume work and safeguard employment”.

The planning documents states further; “targeted sectors are those highly impacted by restrictions put in place against the spread of #Covid-19 and exposed to consumer discretionary spending and those with global supply chains that are being disrupted”.

However, this document does not clearly indicate how much RwandAir will receive.

By estimated size of the recovery plan unveiled by the government of Rwanda set  at over US$800 million over next 2 years, it is  anticipated that RwandAir as one of the hardest hit businesses is bound to get a very substantial allocation made to it.

Aviation being a capital intensive sector, it only makes sense to allocate substantial resources to keep RwandAir a major strategic public investment afloat.

The support will also make it cushion the carrier to steadily reposition it for its medium strategic partnership with Qatar Airways.

Experts argue that regional carriers such as RwandAir in the post #Covid-19 pandemic scenario need to diversify their sources of revenue by cutting over reliance on passenger services.

This thinking sits very well with Rwanda’s overall strategy of boosting competitiveness of its products within regional and international markets while ensuring that its land locked economy transforms into a connected one to rest of the world.

Rwanda went into a 45-day total lockdown that effectively grounded its budding aviation sector in a bid to flatten the curve of the pandemic.

The sector is known to handle more than 800,000 passengers annually from its hub at Kigali International Airport. Policy makers singled it out as the primary importer and distributor of the virus into the country.

Experts in the sector say that the #Covid-19 pandemic has exposed the weak points of Africa’s aviation sector. Practically, all operators in Africa RwandAir included are currently experiencing severe financial difficulties.

Prior to the pandemic, RwandaAir with plans of emerging as a leading regional player was meant to get into execution stage as part of a Rwanda- Qatar U$1.3 billion deal.

However, in the current situation RwandAir with exception of big time player Ethiopian airlines and other carries have found themselves lacking long haul cargo aircraft.

In the short term, RwandAir’s prospects of venturing more aggressively into cargo business will be hampered by its inability to conduct serious freight business at the moment due to lack long range cargo aircraft.

The only choice open for RwandAir is for it to resort to using its passenger planes into freighters.

Technically, using passenger planes makes such planes carry very minimal cargo, making the venture not viable.

“The cost of using a passenger aircraft is higher than a freighter because of too much wasted space as the cargoes are placed on the seats,” an expert says.

“However it is far much better than packing the planes in the tarmac,” he says.

In the post #Covid-19 scenario, cargo business will become more viable since only a handful of carriers in East Africa will be able to get into it.

Therefore when the Rwanda-Qatar deal is executed, RwandAir will indulge more into long haul cargo planes. By this adjustment, the carrier can reinvent itself in the African aviation sector.

Under terms of Rwanda- Qatar deal , reports say that Qatar Airways will operate some of its flights from Kigali with objective being to save the carrier operational costs.

If that happens then the regional aviation sector dynamics will change drastically especially in terms of cost reduction to end clients as Qatar Airways is highly subsidised. Other unconfirmed reports claim there is more at play than meets the eye in the Rwanda-Qatar deal.

In the post #Covid-19 scenario RwandAir is struggling to stay afloat  but will need a financially muscled partner and Qatar Airways might be handy.

Qatar is believed to have paid U$780 million for the deal, with most of the funds going to the initial construction and first years of operation of the new airport at Bugesera.

The balance of U$520 million is believed to be available for funding requirements of operations including a possible bail out of RwandAir.

According to aviation experts flag carriers such as RwandAir can readily bank on cargo business, which generates about U$102 million annually.This is type of cash can keep these carriers going.

At the moment aviation experts say that using passenger aircraft ensures that carriers are able to evacuate 40 tonnes of cargo on a one-way trip with very minimal cargo on return leg.

This is what RwandAir is doing at the moment with the cargo deals it is executing such as the recent transporting of goods from Rwanda and Tanzania to Europe or lifting of Chinese goods to Rwanda.

On other hand factory made freight planes are known to have capacity to move approximately 100 tonnes.

Such specialised planes enable carriers that buy them to have economies of scale making it viable for long haul cargo business.

It’s not just RwandAir that is caught in the current mess. All other major airlines have also deployed their passenger aircraft to ferry cargo across the world.

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2 Comments

2 Comments

  1. Oluwaseun

    May 19, 2020 at 2:07 pm

    Which rwandar air line will be open

  2. FRITZ ENOWNJI

    May 19, 2020 at 10:46 pm

    Is there any expected time for passengers flight to resume?

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Ecobank Transnational Incorporated Lists On LSE For US$350M

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Ecobank Transnational Incorporated (“ETI”), the Lomé based parent company of the Ecobank Group (www.Ecobank.com), was hosted today by the London Stock Exchange for a market opening virtual ceremony to celebrate the successful listing of the Tier 2 Sustainability Notes on the London Stock Exchange (LSE) main market.

This represents the first ever Tier 2 Sustainability Notes by a financial institution in Sub-Saharan Africa.

This Tier 2 issuance is the first to have a Basel III-compliant 10NC5 structure outside of South Africa in 144A/RegS format and is now listed on the main market of the London Stock Exchange.

The bond, which matures in June 2031, has a call option in June 2026 and was issued with a coupon of 8.75% with interest payable semi-annually in arrears.

An equivalent amount of the net proceeds from the notes will be used by ETI to finance or re-finance, new or existing eligible assets as described in ETI’s Sustainable Finance Framework, available at https://bit.ly/3j4xrlb on which DNV issued a Second Party Opinion.

Investor interest for this Sophomore Eurobond issue was global, including United Kingdom, United States, Europe, the Middle East, Asia and Africa, achieving a 3.6x oversubscribed orderbook, of over US$1.3 billion at its peak.

Ade Ayeyemi, Group Chief Executive Officer of ETI, stated: “The strong global interest in our issuance reflects investors’ confidence in Ecobank’s strategy and our commitment to sustainable financing. We thank the LSE for hosting ETI today and look forward to value creation for all our stakeholders. ”

The Joint Lead Managers and Bookrunners in the transaction were Citi, Mashreq, Renaissance Capital and Standard Chartered Bank.

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Botswana Finds Another Diamond Larger than 1000ct

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Botswana has delivered another diamond at 1 174.76 ct from Karowe mine a producer of high-quality rough diamonds.

It is the third diamond weighing more than 1,000 ct to be recovered from the South Lobe of the AK6 kimberlite since 2015.

In recent years, Lucara had recovered the 1,758 ct Sewelô and the 1,109 ct Lesedi La Rona diamonds from the South Lobe.

Lucara’s latest find also follows hot on the heels of the recovery of a 1,098 ct diamond by Debswana at its Jwaneng mine, in Botswana.

When Debswana announced the find on June 16, that diamond was said to be the world’s third-largest.

The 3,106 ct Cullinan diamond recovered in South Africa in 1905 is the largest diamond ever to be recovered.

“Lucara is delighted to be reporting another historic diamond recovery and its third diamond over 1,000 ct – a world record for Karowe.

“Although complex, these diamond recoveries do contain large domains of top-colour white gems that will be transformed through our partnership with HB Antwerp into valuable collections of top-colour polished diamonds, very much in high demand in the market today,” comments Lucara CEO Eira Thomas.

Lucara notes that the 1,174 ct diamond was recovered in the Mega Diamond Recovery XRT circuit at Karowe.

“On the same production day, several other diamonds of similar appearance – a 471 ct, a 218 ct and a 159 ct – were recovered at the main XRT circuit, indicating the 1,174 ct diamond was part of a larger diamond with an estimated weight of more than 2,000 ct,” the company points out.

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Swiss Glencore Plc Hints On Reopening Idle Cobalt Mine In DRC

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Glencore Plc could reopen its Mutanda Mining copper and cobalt project in Democratic Republic of Congo by the end of 2021, about two years after idling the mine.

Congo’s new mines minister, Antoinette N’Samba Kalambayi met with representatives from the Swiss company Monday to discuss the restart of the mine, which closed in November 2019, the ministry said in a statement sent to reporters.

Mutanda “will start the commissioning of operations towards the end of this year in order to allow the return to production in 2022,” Glencore said in a separate emailed statement.

A reopening of Mutanda, one of the world’s biggest cobalt mines, comes when there’s renewed demand for battery metals as automakers focus on metal-intensive electric vehicles and global economies shift away from fossil fuels in favor of cleaner technologies that use electricity for energy.

Cobalt and copper are key metals in that transition.

Glencore said in August 2019 that it would close the mine for two years to carry out care and maintenance after prices of cobalt slumped.

Mutanda was responsible for a fifth of global cobalt production in 2018, according to Darton Commodities Ltd., a U.K.-based firm that specializes in the metal.

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