Angolan media is reporting that Qatar Airways is exploring a sizable investment in troubled TAAG Angola Airlines.
In a move aimed at turning TAAG from a steady loss-leader into a profitable airline, state-owned TAAG is selling a 39% stake to Qatar Airways. Per Novo Jornal, the government will retain a 51% stake in the airline, but “delegate” decision making to Qatar Airways. The remaining 10% of shares would go to workers.
Qatar Airways recently announced it would start 4x-weekly service between Doha and Luanda starting in March 2020. Qatar will use a high-density Boeing 787 Dreamliner on the route with 22 seats in business class and 232 seats in economy class.
A Risky Move; Just Ask Emirates
Qatar Airways is not the first Gulf carrier to try to turn TAAG around. In 2014, Emirates and TAAG formed a strategic partnership. Emirates was tasked with the same goal as Qatar: turn struggling TAAG around. But by 2017, Emirates pulled out, citing “prolonged difficulties faced in the repatriation of revenues.”
There is great potential in a poorly-run state airline with a relatively modern Boeing fleet in an oil rich nation. I understand why Qatar Airways would be interested in this investment.
But look at what is going on with Air Italy right now (huge losses).
By all accounts, TAAG is a bloated and inefficient airline set in its ways. Qatar Airways has a tall task in remaking this airlines. With the government retaining a majority share, my fear is that TAAG is just looking for investment money, not the sort painful cuts that may be necessary to transform it to a profitable carrier.
I’m so intrigued by TAAG and visiting Angola. Whether Qatar Airways invests or not, I plan to do it sooner rather than later. But there is no denying this investment is a very risky one. We must learn from the mistakes of others, for we cannot live long enough to make them all on our own.
image: Shadman Samee / CC 2.0