Why I Am Not Excited About The New Uganda Airlines

April 23rd, 2019 / Hillary K Bainny
| President Museveni and Mama Janet Museveni receive the first two bombadier planes

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At 9:23am today morning, I was woken up by a phone call from my mother. The reason for her phone call, was to know, if I was watching news. “Mum, I am not watching TV. I had a long night of research and your phone call just woke me up,” I said to her.

Her voice beaming with excitement, she told me that she was watching NBS as she awaited the touchdown of the New Uganda Airlines jets. I did not want to cut her excitement short and said i would switch on the TV and witness the historic moment.

A few minutes later, the first two of the newly acquired Uganda Airlines aircraft landed at Entebbe airport. The Bombardier CRJ900s, flew in from Canada.

The aircraft purchased are the first in the series to have the new cabin enhancements and Uganda Airlines will be the first airline in Africa to operate them.

Uganda Airlines will also later in the year take delivery of two more Bombardier CRJ900s, to be followed next year with two Airbus A330-800 neo jetliners.

I have said this before and shall reiterate it, WHAT WE ARE DOING, AS A COUNTRY IS WRONG. We have decided to buy four Bombardier aeroplanes to do internal (I am very interested in knowing the domestic routes) and external flights ( I do anticipate Kenya, DRC, Rwanda and Tanzania to be among the first external routes.).

Kenya and Rwanda and recently Tanzania have done it, why not Uganda? Many Ugandans will ask!!!!

We all know that Kenya Airways and Rwandair are not doing well, for all the years they have been in operation.

Why go into trouble if you know your neighbour is in trouble? You run a loss making project, why should you go back to the same project?

Maybe you think that you will do better this time round!! What are you going to do differently from your very own neighbours, and outperform them?

The first national carrier for Uganda, Uganda Airlines, was formed with an airline fleet of 15 aircraft linking the country to Africa, Europe and Middle East. However, the airline suffered financial difficulties and in May 2001, it was liquidated after years of losses.

Today, there are only three major sub-Saharan intercontinental airlines: Kenya Airways, Ethiopian Airlines, and South African Airways. The only profitable one is Ethiopian Airlines (it’s not managed by the government), but the others incur hundreds of millions in losses every year, and survive on government bailouts.

African national airlines, in particular, offer little to be proud of. The majority of state-owned airlines have failed, and it is worsened by not being able to make enough revenue to cover their costs.

With clear-cut evidence that state-owned airlines waste resources, costing the continent millions of jobs and billions in revenue, the Dream and Pride to have a National carrier Just Won’t Die.

Government’s take is that investment in the national carrier should be considered as an infrastructure for enhancing the country’s global connectivity and boosting our tourism industry.

But, as David Basobokwe, (a retired aeronautical engineer with 35 years of experience) asked, “What is the use of bringing 20 tourists from the UK to Uganda who will give you say $50 and you lose a million?” Does that make sense (economic sense) to you?

To think that Government is investing billions (280bn) of money in a loss venture, while depriving people of basic social services in the name of an airline, makes my heart bleed.

Although impressive economic growth within the past two decades in Africa has spurred demand for air travel and most projections paint a positive picture for African aviation and incumbents such as Ethiopian remain upbeat about the prospects for the continent’s air transport market, Uganda airlines is entering a radically altered marketplace that calls for deep pockets and smart business strategies.

Average annual growth in passenger air travel in Africa is estimated at 7.5%, compared with a global average of 7.9% in 2017. Despite this unprecedented growth in air travel, the market in Africa is still untapped. And much as the continent constitutes about 12% of the world’s population, air travel in Africa is  only 1% of the global air travel market.

Foreign airlines are now picking up the slack left by defunct national carriers in Africa. This has included US airlines like Delta Airlines and Middle East carriers like Emirates, that now flies twice to Lagos, Nigeria, and is expanding its routes within Africa. Qatar airways recently launched a new route from Doha to Mombasa.

Demand in Africa is expected to continue to grow, due mainly to a phenomenal increase in the size of Africa’s middle class. It’s estimated that the middle class in Africa and the Middle East will more than double, from 137 million in 2013 to 341 million in 2030.

It’s not difficult to fathom that the idea of a national airline in Uganda is purely a gamble. Nearly all the problems that beset Uganda Airlines, and which eventually resulted in its demise in 2001, are still present.

One is monumental corruption. From the very little we know about airline, from the name, to allocation of shares and personnel matters, the whole thing smells funny. It is still unclear who owns the name “Uganda Airlines”. Our bureaucrats couldn’t even get the paperwork for the establishment of the airline properly filed. Whether it is a case of deliberate obfuscation or incompetence, it doesn’t bode well for our money.

Another problem that undermined the performance of Uganda Airlines, and which the new airline would also have to face, is Political interference. During the Initial Uganda Airlines era, Government officials were dolling out free or heavily subsidised airline tickets to political elites and their inner circles. There is a story about a Government official who had to call back the Plane after it had set off.

Another reason why it shall be an uphill task for Uganda to sustain a national carrier is the fact that the competitive landscape in the global airline industry has changed dramatically since the days of Uganda Airlines. There are now far more competitors. Both regional and International.

Uganda Airlines will have to compete with a host of new airlines. Learning how to compete in a crowded market would certainly be a daunting task for the new national airline. This would become particularly onerous given that many foreign airlines are heavily subsidised by their own governments.

Given all these facts, it hardly seems likely that the New Uganda Airlines will avoid the very reasons that led to its collapse in 2001..

My next article, as a series on UGANDA AIRLINES shall be on “Investing In Domestic Tourism.”

Share with us your thoughts.

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    Brian Namanya April 23rd, 2019

    Interesting perspective but I believe the country needs projects like this...not to create money but to inspire the Nationals. We're moving so fast into a one global economy and this opportunity presents new global business models for the airline. Let me

  • User Avatar
    Hillary K Bainny April 23rd, 2019

    Thank you for your opinion. Your opinion shall be factored in my next post. I was to address it, and you flagging it already makes it a MUST