Is Uganda Airlines another prestige project devoid of sound economics?

After vowing for ages that the defunct Uganda Airlines would be revived, finally something is stirring. Ephraim Bagenda, who goes by the title of CEO of the revival, has been pictured beaming with satisfaction after committing Uganda to pay Shs700 billion for four planes.

Two additional Airbus 330 Neo jets have also been ordered. The airline will start with six new planes. That is all well and good but planes are just the hardware of an airline. The software is another ball game altogether.

The other fear is whether this is not just another phantom project commonly known as a “kiwaani” to enrich well connected individuals close to the ruling establishment.

It was Frank Zappa who facetiously said, “You can’t be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer.”

Countries also hanker after a national newspaper. The US stands out as an exception. It has no national airline. It also has no national newspaper.

I wonder whether buying six jets and painting their tails in our national colours will bring more tourists to Uganda or boost our international standing.

Doesn’t it make better economic sense to pay KLM to paint a picture of the Crested Crane or Zakayo’s heir on their fin than increasing our national debt to raise up a dead airline?

What is the point of having a government-owned national carrier if it will divert resources away from investments in infrastructure, education, housing and health?

Also many problems will likely dog the airline. These include high level corruption, lack of a viable business model, failure to adhere to set rules, reckless borrowing, undue interference by government officials and the usual rough and tumble of internal power tussles and politics. I still wonder how the CEO was recruited!

Some serious voices would beg to differ. During the long 2010 British Airways strike Jon Aberdeen wrote in a BBC news magazine article titled British Airways strike: Do we still need flag carriers? that, “There is still great value, both for the airline and the nation, in being recognised as a ‘flag carrier’.

Why? It’s an issue of brand – and, in business, there is nothing more important. Corporations spend billions creating, maintaining, and defending their brands – it truly is critical to their success. For a discount airline – an EasyJet or RyanAir – the brand is ‘cheapest available’, and little more… However, the brand of a flag carrier represents a ‘safe choice’ for passengers, with an expectation of safety and quality service, and some element of prestige.”

There are also those who argue that a country is more likely to attract trade if it has direct air links courtesy of a national carrier.
Uganda loses to foreign airlines and having a national carrier brings benefits under the so called Bilateral Aviation Services Agreements.

Currently it is foreign airlines that ply the routes to, from and via Entebbe. Bereft of choice, passengers flying the Entebbe-Nairobi route groan under the highest flight cost in the world.

That said, this may be a prestige project. A hot air balloon. Megalomaniacal leaders, have obsessions and idiosyncrasies. They put public resources into prestige projects. Adolf Hitler had his Germania. The Roman dictators had the Coliseum.

The French and British had the Concorde. Houphet Boigny of Côte d’Ivoire had his Yamoussoukro Our Lady of Peace Cathedral which was later declared a Basilica by the Vatican.

Rather than resurrecting Uganda Airlines, the government should create an enabling environment for private Ugandan owned airlines to thrive. There should be modern infrastructure, affordable aviation fuel, tax incentives and zero tolerance to corruption. Eventually, one of the airlines will emerge as a national carrier.