What is the impact of airline alliances? A case study of Qatar airways investment in Rwanda

Abstract

The study aimed to establish the impact of airline alliances with a case study of Qatar Airways investment in Rwanda. In precision, was to detennine the impact of Qatar airways venture in Rwanda on passenger traffic through Bugesera international airport and the impact of Qatar airways venture in Rwanda on passenger traffic through Jomo Kenyatta International Airport and Addis Ababa Bole International Airport. The study was guided by the event study methodology, dummy variable approach, in its analysis. The data in consideration is air passenger numbers for four hubs from the years 2010 to 2018. A dummy variable was introduced for the year post the venture to analyse the effects. The results showed that the venture did have an impact on passenger number traffic in Bugesera, Jomo Kenyatta, and Bole International Airports. The airports registered increases in air passenger traffic of 444,639, 841,767 and 4,468,258 annually respectively. Increases in passenger traffic for the hubs led to the conclusion that the hubs are complementary as opposed to being competitive. The r-squared from the regression analysis were 57.15, 61.8% and 73.7% respectively which led to the implication that impact of the dummy explained the variations in passenger traffic in Bugesera, Jomo Kenyatta and Bole International Airport's respectively. Policy implications from the study concluded that smaller airlines benefit from fanning an alliance with already established airlines and that leading hubs also benefit from alliances. The study therefore met the objectives. Key words: Airline alliances, Qatar venture, Impact of alliances