World News

Qatar Airways swoops for RwandAir stake and eyes bigger LATAM holding

By Alexander Cornwell

DOHA (Reuters) – Qatar Airways is in talks to buy a 49% stake in Africa’s RwandAir and is interested in doubling its holding in LATAM Airlines Group <LTM.SN> to 20%, its chief executive said on Wednesday.

A stake in an African airline would widen its reach in one of the world’s fastest-growing aviation regions and potentially help it to bypass restrictions imposed on it by some Arab states.

“We are very tough negotiators … we will take our time to negotiate,” CEO Akbar al-Baker told reporters in Doha.

State-owned Qatar Airways already owns stakes in British Airways parent International Airlines Group <ICAG.L>, China Southern <600029.SS>, Cathay Pacific <0293.HK> and LATAM.

It bought some of its holdings in other airlines after the United Arab Emirates and Saudi Arabia banned it from their airspace after a regional political dispute.

Qatar Airways, which flies to more than 160 destinations, has been forced to fly longer routes to avoid the blocked airspace of some of its neighbors.

The ban does not apply to non-Qatari airlines flying to Qatar, meaning that RwandAir could potentially carry passengers from Africa over the blocked airspace to the state-owned airline’s Doha hub without restrictions.

RwandAir flies to 29 destinations, mostly in Africa, but also to Dubai, Mumbai and Brussels.

Its CEO, Yvonne Manzi Makolo, confirmed to Reuters that talks to sell a stake were under way but declined to comment further.

Qatar Airways agreed in December to take a 60% stake in a new airport in Rwanda.

Baker, one of aviation’s most well-known executives, also said the airline could be interested in increasing its holding in LATAM and working with fellow shareholder Delta Air Lines <DAL.N>.

“When the right opportunity comes, and at the right price, we will look at increasing our investment in LATAM,” he told Reuters, adding that it would be interested in having the same size stake as Delta. Delta has a 20% holding, double the 10% owned by Qatar Airways.

Delta surprised the industry when it announced in September that it was taking a $1.9 billion 20% stake in the South American airline group.

Qatar Airways has had a contentious relationship with Delta and other major U.S. carriers, which have accused Gulf airlines of receiving unfair government subsidies, distorting competition and costing Americans jobs. The Gulf carriers have rejected such accusations.

However, Baker said there is no ill-feeling towards Delta and Qatar Airways is willing to work with the U.S. airline at its hub in Atlanta.

“We can transfer passengers on each other. We are the only Middle Eastern carrier going into their hub, so there is huge opportunity,” he said.

Qatar Airways has also expressed interest in taking a stake in India’s IndiGo and Morocco’s Royal Air Maroc.

(Reporting by Alexander Cornwell; Editing by Peter Graff and David Goodman)