Airlink CEO Rodger Foster and Qatar Airways Group CEO, Engr Badr Mohammed Al-Meer at the signing of their agreement. Picture: Supplied
Regional carrier Airlink Airways has tipped the scales in the local and regional aviation industry with an equity partnership with cash-flush Qatar Airways, which should deliver more Middle East traffic to local shores and an adjustment of ticket prices as the groups announced a code-sharing agreement in their respective regions.
Under the equity agreement both carriers seek to align loyalty programmes – Qatar Airways Privilege Club, and Airlink Skybucks.
Aviation analyst, Phuthego Mojapele, said as Qatar’s stake in Airlink amounted to less than 50%, there were unlikely to be regulatory hurdles on the foreign ownership quota, though Airlink still had the decision on the matter between it and Safair hovering in the air.
“Airlink had been vulnerable to the competition and when they divested from SAA, there has been a need for a strong partner with financial muscle. Most of their ticket sales went into operations and did not leave much room for expansion,” Mojapele said.
“This will work to their advantage to have foreign shareholding with Qatar Airways as well as expanding their now Southern and Eastern African footprint.”
He said among the advantages would hopefully be the increased capacity of Airlink which would for the reduction of air ticket prices, as Airlink currently has among the highest prices in the local market.
“We will see the opportunity to be competitive with other airlines, including Safair. The penetration of Qatar in Rwanda will give the competition to other UAE airlines like Emirates a run for their money. There are still the Competition Commission considerations, it will not be automatic but it may afford the market better benefits,” he said.
Airlink CEO and managing director, Rodger Foster, said in response to questions that the Safair ownership structure and how it has been interpreted by South African Air Service Licence regulators is the focus of the complaint being considered by the Domestic and International Air Services Licensing Councils.
“The outcome will either confirm the 255 cap and compel Safair to comply with it or it will set a new legal precedent and raise the cap. However this transaction with Qatar Airways is limited to stay within the bounds of present laws, and they have been historically interpreted. We cannot speculate on what may or may not happen in future,” Foster said.
Airlink would not be drawn into details of the form of the equity investment by Qatar on whether it would be a mix of cash and technical support, including the provision of aircraft.
Qatar Airways public relations adviser in Southern Africa, Stephen Forbes, confirmed the airline would not go into the details of the equity investment.
Under the equity partnership announced yesterday, Qatar Airways currently flies to 29 destinations in Africa, and there’s been strong growth in the market with nine new destinations added to the Qatar Airways network on the continent since December, 2020.
Abidjan, Abuja, Accra, Kinshasa, Harare, Kano, Luanda, Lusaka, and Port Harcourt in Nigeria are the African cities newly added to the extensive Qatar Airways network, while Cairo and Alexandria were resumed. Airlink brings to the table its regional network.
The investment in Airlink – which flies to more than 45 destinations in 15 African countries – will enhance a code-sharing partnership between the two airlines.
They said in a statement the deal will bolster the World’s Best Airlines Africa growth strategy and cement its role as a key driver to the continent’s economic success.
“Having Qatar Airways as an equity partner is a powerful endorsement of Airlink and echoes our faith in the markets we currently serve and plan to add to our network. This transaction will unlock growth by providing efficiencies of scale, increasing our capacity, and expanding our marketing reach. By bolstering Airlink and its business, this investment will strengthen all of the existing airline partnerships Airlink has nurtured over the years,” Foster said.
International Air Services Licensing Council chairperson Nomveliso Ntanjana confirmed last month that the decision of the foreign ownership case between Airlink and Safair had been postponed indefinitely earlier this year.
RwandAir and Qatar Airways have in the past weeks finalised its purchase of a major stake in the Central African country’s carrier which would give the Gulf nation’s airline a 49% stake of RwandAir for an undisclosed sum. Qatar Airways in 2019 took a 60% stake in a new $1.3 billion (R23.2bn) international airport being built in Rwanda, and has code-share agreements with several airlines in Africa including RwandAir.
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