Qatar Airways has built a reputation for itself as one of the most important and influential airlines in the world. Reaching that status however is a part of the journey. Once you have achieved the elite status in world aviation the biggest challenge is to maintain it. To do so the airline has invested in various enterprises around the world to help it strengthen its position in strategic and key markets. Among these is Africa, where Qatar Airways has just invested in Airlink.
Qatar Airways Takes a 25% Stake in South African Carrier Airlink
Qatar Airways which has already invested in a number of other carriers around the world has just reached an agreement to take a substantial stake in South African based airline Airlink.
Specifically, they will be taking over 25% of the airlink shares becoming one of the largest stakeholders in the African regional airline. The investment will give the middle eastern carrier quite an influence over decision made by the newly acquired carrier. On the other hand, it is significant for Airlink to have such a huge new investor and backer.
Also, the newly announced investment will come with some operational implications too. The airlines will strengthen their codeshare agreements soon enhancing inter-network connectivity and integration.
Why Is Qatar Airways Investing in Airlink
There is a dual reasoning for an investment of this sort in Airlink:
- Differentiating the markets it has investments in
- Obtaining rapidly a stronger presence in a key market
Africa is a market that offers great opportunities for airlines. The continent has seen constant growth in demand for air travel and foreign airlines are noticing it. Investing in a growing market taking a stake in a carrier like Airlink can pay dividends if the demand continues its upwards trajectory and the airline’s value increases. Also, it allows to differentiate the investment profile outside of the more consolidated aviation markets.
On the other hand, focusing more on the operational side of things, this is a way of creating a quick path to gain a stronger foothold in Africa. By buying a stake in Airlink, Qatar Airways ensures itself the opportunity of enhancing operational agreements to cater to passengers travelling to smaller secondary destinations. Destinations Qatar Airways can’t serve but Airlink can.
The Airline’s Other Investments
The Qatari airline is no stranger to investing in other airlines. Qatar Airways has over the years built up a portfolio of investments in some of the larger aviation household names such as:
- 25% in IAG (BA-Iberia Parent Company)
- 10% in LATAM
- 10% in Cathay Pacific
- 49% in RwandAir
The most significant investment remains to date the IAG one. QR when investing in IAG also adopted the group’s frequent flyer program currency, Avios which it shares with British Airways, Iberia, and Finnair.