Qatar Airways Acquires 25% Stake In South Africa’s Airlink

Qatar Airways announced on Aug. 20 that it has acquired a 25% stake in South African regional carrier Airlink.

By injecting fresh equity into Airlink, Qatar Airways hopes to boost the Johannesburg-based carrier’s growth trajectory.

The investment is part of Qatar Airways’ strategy to expand its presence in Africa, which CEO Badr Mohammed Al-Meer describes as “underserved.” The Oneworld alliance member currently serves more than 29 destinations in Africa, reporting strong growth in the market.

“Qatar Airways cannot cover all of Africa. The idea of this partnership [with Airlink] is basically to cover the destinations Qatar Airways cannot operate to,” Al-Meer said during the Doha press conference on Aug. 20 announcing the partnership. “Our investment in Airlink further demonstrates how integral we see Africa to our business’ future.”

“This partnership not only demonstrates our confidence in Airlink, as a company that is resilient, agile, financially robust and governed on sound principles, but also in Africa as a whole, showing huge potential,” Al-Meer said. “My team and I look forward to working closely with Rodger [Foster, Airlink CEO] and his team to benefit our two airlines and millions of passengers we will serve. We couldn’t find a better partner in South Africa than Airlink.”

Airlink CEO Foster said the Qatar Airways investment was a vote of confidence in “our business model and our delivery of premium quality services and convenient connectivity.”

“When it takes a look to add value, it is not just about the equity—it’s about the expertise, the global reach [of Qatar Airways],” Foster said.

Commenting in an email to Aviation Week, Foster said, “Qatar Airways has scale and bargaining leverage that will benefit Airlink. The fresh equity will bolster Airlink’s balance sheet and ena-ble new agility.”

For Airlink, the CEO made clear that the carrier will build up frequencies on existing routes, looking to new destinations. “And then there are one or two routes that over time need larger-gauge aircraft in order to drive lower unit costs to be more competitive in a highly competitive arena,” Foster said.

“Airlink does need to up-gauge to larger single-aisle/narrow body aircraft for some of the trunk routes where we need to achieve lower unit costs,” Foster said. “With Qatar Airways, we will definitely be exploring potential opportunities and benefits relating to fleet planning,”

Foster said Airlink’s fleet of over 60 modern Embraer aircraft is flying over four million passengers a year on over 85,000 flights to over 50 destinations in 15 countries across southern and east Africa, as well as Madagascar and St. Helena Island. The Airlink fleet comprises Embraer 16 ERJ135s, 11 ERJ140s, seven E170/175s, 28 E190s and six E195 jets.

Conservative Approach

Foster said Airlink is running a conservative business. “We always have been a feet-on-the-ground approach, that this is the right approach,” he said. “In the short to medium term, Airlink does not have any expectations of even thinking about intercontinental travel, and certainly not larger aircraft than we are familiar with.”

Foster said the investment from Qatar Airways will unlock growth by providing efficiencies of scale, increasing capacity and expanding the carrier’s marketing reach.

“Qatar Airways’ investment has altered Airlink’s growth trajectory,” Foster said. “While Airlink has expanded strategically and organically over the past four years, the fresh equity will enable us to shift up a higher gear, enabling Airlink to grow faster, unlock opportunities that strengthen Airlink and enhance its competitiveness across all areas of all our business.”

Besides a codesharing partnership between the two airlines, the deal will align the carriers’ loyalty programs.

Qatar Airways’ presence in Africa includes 29 directly served destinations from Doha Hamad International Airport augmented by partnerships. The airline has a strong working relationship with Oneworld partner Royal Air Maroc in the northern part of the continent.

Central Africa is already addressed by cooperation with Rwandair. “We might be investing in Rwandair [for] 49%, also in the new airport of Kigali, 60%,” Al-Meer said.