Why British Airways threw in the towel

British Airways (BA) was once the only option to fly to London from Entebbe International Airport.
When BA re-launched its London to Entebbe operations in 1991, they took over an underserved route coming in at a time when Uganda had begun regulating the sector more effectively after setting up Civil Aviation Authority.
But 24 years later, BA has decided to shed the Uganda route after failure to turn into a profit making venture. BA doesn’t release financial results on a country by country basis, making harder to ascertain how big the loss was on the route.

“Unmatched” dominance
With its entry in 1991 it would be the beginning of an era of dominance, at least until the Middle East carriers came into the country and disrupted the monopoly.
Initially, BA was operating three flights a week to London. By 1999, it was operating a near monopoly on that route as Uganda’s aviation sector was dealing with its own turbulence - Uganda Airlines, which effectively failed to compete with BA to the UK route.

Alliance Air, a joint venture operation by South African Airways, Government of Uganda and Tanzania made its first shot at the route in the late 1990’s but the venture collapsed at the end of 2000.
In 2002, AfricaOne started operating Entebbe to Gatwick Airport London with President Museveni flying on its maiden flight on April 29, 2002 but even this didn’t save it from exiting in just a year.

BA roared on as people continued to fly with the carrier only rivaled by European carriers, Air France (operating out of Paris) and Sabena Airlines from Brussels.
Sabena’s Uganda route was eventually taken over by SN Brussels in 2002.
Kenya Airways, which connected passengers through Amsterdam and Gulf Air, which connected through Bahrain but exited in late 2001, remained as the only competitors to British Airways – albeit weak at that.
By 2009, BA had dominated the competition increasing its flights from Entebbe to London from three-times-a-week to five times.

But what could have informed BA’s exit?
Some have noted that BA’s exit is no surprise because of underlying fundamentals, especially in terms of trade.
Whereas some traders have redirected their efforts to China and India, UK remains a powerful trading partner with Uganda, not considering it has been turbulent for at least five years.
Imports from the UK in 2000 stood at $84m with exports standing at nearly $30m. However, there was a fast-paced growth, rising to $134m in 2011.
However, in 2014 it experienced a drop falling to $100m in 2014, which represented an import growth of 19 per cent between 2000 and 2014.

Exports have been flat in the same period, despite peaking at $54m in 2011.
And as it seems, BA has been courting these trade ties on hand and also bringing in tourists from the UK.
As of 2013, according to the Uganda Tourism Board, at least 60 per cent of all visitors from Europe were from UK.
And like the trade figures, 2011 was the best year with visitors from the UK growing to 77,702 but dropping in 2013, to 43,000, which again, according to market analysts wasn’t too bad.

But if the numbers are looking good, why would BA exit Uganda?
In a statement, BA noted the decision to halt their services was after several reviews and evaluations, noting that such a decision was “extremely hard to make.”
“Unfortunately we have concluded that at the present time our services to Entebbe are not commercially viable,” the statement says.
The decision, inevitable as it was, was a hard one with the airline saying: “Sometimes the outcome of these reviews leave us with decisions like this one that are extremely hard to make.”
The statement was almost similar to a media communication that was released after the airlines decided to suspend operations in Tanzania in 2014 and Zambia in 2013.

British Airways ownership
British Airways is owned by International Airlines Group. In January 2015, Qatar Airways bought a 10 per cent stake in the group, which, according to Financial Times “this deal might involve some of Qatar Airways’ passengers flying on BA aircraft between Europe and North America — the UK carrier’s most prized routes.”

The losers
The biggest losers in BA’s exit from Uganda are those that preferred direct flights to London rather than connecting, not considering that BA offered much more baggage space and discounts for charity organisations from the UK.

Emergence of rivals

Globally, three airlines are dominating the airspace and taking on traditional carriers.
The three, including, Qatar, Etihad and Emirates are also on the Ugandan turf, flying to various destinations out of Entebbe International Airport.
Emirates was the first of the three to fly to Entebbe, and that was in March 2000. It started with three flights a week with an initial target of becoming the carrier of choice from Uganda to the Middle East.

In 2012 Qatar Airways also started flying to Uganda with a stop-over in Kigali followed by Etihad Airways, which launched flights to Uganda in May 2015.
All these airlines, including others such as Turkish Airlines, Ethiopian and FlyDubai seemed to have given passengers options rather than relying on only British Airways.
Notably trade with China is growing at a much faster pace than any other country, which is driving up increased air travel, not considering that people can connect to other destinations through the hubs in Dubai, Doha and Abu Dhabi, without having to pay transit visas if you don’t leave the airport premises.

At London Heathrow, all travellers are required to pay at least $46 for a transit visa, even when they are not intending to leave the airport premises.
The three airlines have been accused, mostly by American carriers, of enjoying subsidies from their countries.

[email protected]