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.
CONCLUSION
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
What does Qatar Airways know about making a profit?
Come over whenever Matt. But yeah Qatar has a lot of work to do here and really needs to learn from what happened when Emirates was here. There is definitely a lot resistance when it comes to real changes needed to make the company truly profitable and in line with all the rules and regulations of international aviation. Let’s see how that goes.