Friday, 20 May 2022

In Business

Rossiya Airlines Strategically Enters East Africa

In 2019, Rossiya Airlines, one of the top airlines in Russia, begun its entry into the African markets by flying into Zanzibar in Tanzania. There are over 80 Cargo and Passenger airlines in Russia, and Rossiya Airlines is amongst the top ten of them. They have not been known for their flight in and out of Africa until the Zanzibar entry in 2019.

Rossiya Airlines is one of the oldest and largest airlines in the Russian Federation. Founded on May 7, 1934, it belongs to the Aeroflot Group and is the largest base airline of the St. Petersburg Pulkovo Airport International Airport.

Rossiya received a number of prestigious awards. Skyway Service Award in three categories, Travellers’ Choice 2019 Award from TripAdvisor, the Award for contribution to the development of regional air transport within the framework of the IX international conference (Regional aviation of Russia and the CIS-2019), Amur Tiger Center Award for contribution to the conservation of wild cats, and the award from the British publication Travel Plus. 

The company was also ranked among the top-10 airlines in Eastern Europe in the Skytrax World Airline Awards 2019 and among the 50 most valuable brands in the country by Brand Finance. The research Agency Jacdec included Rossiya into the list of the safest airlines in the world.

The big question would be, why Zanzibar, why Tanzania, and the answer lies in two things - leisure and investment. 

Zanzibar is the Hawaii of Africa.

Zanzibar is a Tanzanian archipelago off the coast of East Africa. On its main island, Unguja, familiarly called Zanzibar, is Stone Town, a historic trade centre with Swahili and Islamic influences. Its winding lanes present minarets, carved doorways and 19th-century landmarks such as the House of Wonders, a former sultan’s palace. The northern villages Nungwi and Kendwa have wide beaches lined with hotels. The main town, Dar es Salaam, includes the German Institute, an Anglican church and the substantial colonial-era German Consulate. 

Russian airlines have always flown in and out of Tanzania, and the first Russian airline to enter into Tanzania was Aeroflot in 2000, meaning Russian tourists and business people, have always loved Tanzania, Zanzibar in particular. 

Zanzibar is the home of idyllic beaches, balmy weather & warm tropical waters. This archipelago is renowned for clear warm waters, coral reefs and rich marine diversity making it a perfect under-water destination for snorkelling and diving. Zanzibar has a long history of slave trading, and a rich colonial heritage, making it a historical tourist attraction – these are just some of the reasons why I found Stone Town so fascinating to visit! It's a mix of African, Arabic, and colonial styles all packed into one city.

Zanzibar is considered a leisure destination for the wealthy, hence high end, or "expensive" as many would say. Compared to the Tanzania mainland, Zanzibar is expensive because it is an island, meaning that import fees and high taxes increase the prices. Zanzibar is also a tourist place, so hotels, restaurants, and luxury accommodations are more expensive on Zanzibar.

Then comes the trade aspects. Rossiya Airlines is part of the business corridor that transports business owners and investors from Russia, into Africa. Generally, Russia has a business history with Northern countries in Africa, and in recent decades, has begun expanding into the South, through the eastern corridors. 

According to Russia Briefing, the Russian Export Centre pays priority attention to the development of relations with sub-Saharan Africa. The outcome of 2020, the volume of non-commodity export amounted to US$432.1 million. There was support for the supply of Russian products in 34 countries of the region.

The main destinations of Russian non-commodity exports were: Rwanda (US$165 million), South Africa (US$32 million), Zambia (US$27.5 million), Tanzania (US$17.8 million), Ghana (US$17.1 million), Kenya (US$16.6 million) and Uganda (US$14.6 million). The primary export industries are agriculture, mechanical engineering, chemical industry, timber industry, and metallurgical.

The Russian Export Centre takes part in the development of prospects for the participation of Russian companies in many infrastructure projects, such as the equipment and construction of hydroelectric power plants in several countries in East Africa, and the construction of a railway in West Africa.

Today, our portfolio also includes projects for supplying products from the Russian automobile industry to Ghana, Nigeria, and Ethiopia. A project for providing agricultural and railway equipment to several countries in South Africa is being worked out. In total, the work is carried out on projects in 18 countries of the region.

With the participation of the Russian Export Centre the implementation of many landmark projects of Russian companies in Africa in critical industries, whose products are most in-demand on the continent, is being discussed. It’s about the mining industry, metallurgy, chemical industry, agricultural products, infrastructure projects.

Special attention is paid to the development of exports of Russian high-tech products, the possibilities of supplying medical equipment, high-tech solutions in the field of hydro and solar energy, communication and security systems are being worked out. It is important to note that most of these projects are long-term, and their full implementation and delivery of results require long-term collaboration with African counterparts.

Since December 2021, the Russian Export Centre has accredited partners in countries such as the Democratic Republic of the Congo, Angola, the Republic of the Congo, Ivory Coast, and Rwanda. Partners in countries such as Ethiopia, Kenya, Tanzania, Ghana, and Senegal are in the process of accreditation.

They recorded an increase in the interest of Russian exporters in providing both financial services (lending and insurance) and non-financial services (search for a foreign buyer, top-level search for a partner) in West Africa (Nigeria, Benin, Ghana, Ivory Coast) and many East African countries (Tanzania, Kenya, Ethiopia).

There is an increased interest in Africa by Russian investors, particularly in the East and Southern African economies, where there are record breaking economic growth figures of economies like Rwanda, Botswana, Zimbabwe, and the recent Gas economy of Mozambique.

The travel of these Russian business owners and investors, is being made possible by several airlines, and mostly by the trusted Rossiya Airlines. 

Sources: Rossiya Airlines, Russia Briefing

Cabanga Media Group publishes of thoughtful economic and business commentary magazines and online media, in several African markets, that include South Africa, Botswana, East Africa Community, Ethiopia, Egypt, Nigeria, and Zambia.