Prosper

Airline traffic building up as investment interest grows

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By FARIDAH KULABAKO

Posted  Wednesday, November 16  2011 at  00:00

In Summary

Growing interest. By 1993, Entebbe Airport was handling about 400,000 passengers annually but the number has since risen to over one million passengers, presenting an attractive growth pattern. International passenger traffic to Entebbe Airport grew from 551,853 to 1,023,437 between 2005 and 2010

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Entebbe international airport has been one of the underserved destinations on the African continent.

Now with a growing tourism industry, the lifeblood of the aviation industry, and the discovery of oil together with Uganda’s positive economic prospects, the airport has started attracting the attention of global airlines to make the East African country more connected than ever.

This is expected to provide a link from the traditionally neglected destination to the rest of the world.
Turkish Airlines first followed in the footsteps British Airways, KLM and Emirates when it commenced direct daily flights to Entebbe from its Istanbul hub in mid 2010.

The Istanbul-based airliner was followed by the Doha-based Qatar Airways which commenced direct daily flights to and from Entebbe to its hub early this month.

Giant carriers
Gulf Air, another giant carrier from Bahrain, is also expected to join the growing list of giant carriers plying the Entebbe route after it announced last month that it will re-launch daily flights to Entebbe early next month.
Gulf Air was in in this market until 1993 when it halted operations on grounds of inappropriate aircraft size.

The entry of new carriers serving the international route is expected to break the dominance that has been mostly enjoyed by Emirates, KLM, British Airways and Brussels Airlines; flying to business and holiday destinations in Europe, Middle East and Asia.

With a variety of options for airport users to choose from, competition is expected to heat up, necessitating players to up their game especially in the area of quality of service delivery and pricing, to remain competitive.

Kenya Airways country manager Uganda, Mr Donald Ajuoga said: “Competition is good particularly for consumers as they benefit from affordable and quality services. They also have a wider choice of carriers to travel to their destinations.”

Kenya Airways is East Africa’s market leader both by passenger numbers and revenue. The carrier which flies to 45 African cities is nipping at the heels of EgyptAir and South African Airways, the largest operators on the African continent.

KQ’s shareholders recently approved the carrier’s plan for a rights issue to raise additional capital of about Shs587.4 billion (KShs22 billion) from the stock market to fund its expansion plan as it moves to consolidate its position in the African region.

Turkish Airlines country manager Uganda, Mr Orhan Subay noted that competition will better service delivery and lower air ticket charges to certain destinations.

He said Turkish airline will compete by offering professional services to travellers.

“Turkish Airlines treats travellers as guests but not as passengers and this enables us to serve them better,” Mr Subay told Prosper recently.

International airlines charge between $420 and $800 to overseas destinations, depending on the airline.
Qatar Airways chief executive officer, Mr Akbar Al Baker said in an interview with Prosper recently that the new entrant will offer competitive products that are expected to give it a competitive edge in the industry.
The influx of giant airlines also presents big tourism opportunities for Uganda’s tourism industry to tap into. The development is also expected to open up new job opportunities for Ugandans.

However, as the destination continues to attract global carriers and with the existing ones increasing frequencies and fleets, it is feared that it could pile pressure on the existing facilities, resulting into congestion at Uganda’s only international airport.

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