Business

Govt should revive national airline - player

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By Martin Ssebuyira & Flavia Nalubega

Posted  Wednesday, January 18  2012 at  00:00

In Summary

Uganda has not had a national airline for over 10 years now after Uganda Airlines was liquidated due to in the early 2000s due to mismanagement and government neglect.

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If Uganda is to become a business hub just like Kenya, there is need for the reinstitution of the national airline that was liquidated in the early 2000s, according to Uganda Air Cargo Corporation.

Speaking at the inauguration of UACC’s new C130 cargo aircraft in Entebbe on Monday, Dr Fabius
Byaruhanga, the UACC chairman, said the government should not have fully privatised Uganda Airline due to the enormous advantages of the business in terms of advertisement and boosting tourism.

He said: “Being a capitalist more than Adam Smith will not take Uganda anywhere thus there is need for the government to apply brakes on some of its policies.”

Uganda Airlines was liquidated in 2000 after it fell victim to massive indebtedness resulting from mismanagement and government neglect.

Liquidation of Uganda Airlines
The airlines was privatised in peace-meals and could not generate enough income after cargo handing, a key income section of an airline business, was sold to Entebbe Handling Services (ENHANS) in the early 2000s.
Eng Fred Guyina Kyankya, the corporation’s general manage said: “There is a strong need for a local airline and must be given substantial support by the government in order to turnaround Entebbe Airport’s fortunes.”
In 2010 Kenya handled 5.5 million passengers compared to Entebbe’s 1 million, placing Jomo Kenyatta Airport as the eighth busiest airport in Africa due to the great role played by Kenya Airways.

The airline business is an expensive venture characterised by high entry barriers, high cost of financing and high capital.

This, according to UACC, has barred the growth and survival of private airline initiatives, including: Victoria Air and the East African Airlines among others.

Uganda is the only country in East Africa without a national carrier. Kenya has Kenya Airways, Rwanda - RwandAir and Tanzania - Precision Air.

UACC, afully operational airline business, which started operations in 1974, is wholly owned by the government operated through the ministry of Defence. In 1994 the firm became a statutory entity incorporated by an Act of Parliament.

editotorial@ug.nationmedia.com