Covid-19 halts Uganda Airlines expansion plan

The coronavirus pandemic has thrown Uganda Airlines expansion plan off balance.
Plans by Ugandan Airlines to have its carrier fly to nine new routes starting April 2020 will have to wait a little longer following the outbreak of the corona virus that has forced the airline to suspend all its operations.

Prosper magazine has learnt that the suspension comes at a time when the Airline on March 28, 2020 had concluded all plans to kick-off, starting with Kinshasa, Goma and Lubumbashi routes all in the Democratic Republic of Congo.

Plans paused
According to Mr Perez Ahabwe, the Uganda Airlines board chairman, talks between Uganda Airlines and the aviation teams from Democratic Republic of Congo had progressed, dates had been set for the Crane to start flying this April.

“By the end of April, we had anticipated to have the carrier fly to Lusaka, Harare and Johannesburg and to this effect, we had secured office space in Lusaka to start of the process,” Mr Ahabwe said.

Other routes include the Khartoum – Sudan, Cairo- Egypt and Hargeisa in New Somali Land which were to start by the End of June- 2020

Until last month, Uganda Airlines has been flying to seven routes including Bujumbura, Nairobi, Mombasa, Kigali, Mogadishu, Juba and Zanzibar with an average of five flights a day per plane.

According to the Uganda Airlines business and implementation plan, it is a requirement for the airline to review route performance and market parameters across the established network to see where further investments may be made in the step with actions to extend its markets.

That is what prompted government to add another nine routes on the already existing destinations, bringing the total to sixteen flights due to the profitable routes the airline is currently plying.

Currently, the carrier is doing between 49-50 flights per week in the region, Mr Ahabwe told Prosper magazine.

“To break even, it will happen with in two- to three years from now which is dependent on how many routes we shall be flying to although the coming of the long haul might eat into the finances of the CRJ900,” he added.

Despite the carrier being grounded at Entebbe International Airport requiring servicing, the Airline still has a number of running contracts for the next five to seven years that require them to pay up.

According to the board, it is still hard to determine how much is required in the mean time for both servicing and running contracts. But a meeting will soon be held to discuss the matter.

“We have asked our suppliers especially those in fuel and catering to re-asses our payment plan to allow us pay in phases until the conditions stabilise,” Mr Ahabwe said.

The grounding of the airline has also pushed the arrival of the A330-800 Neo long haul fleet aircrafts from the earlier date of October 2020 in the wake of the Covid-19 disruptions from the previous plan under which the first airframe should have been delivered in December 2020.

Under the revised schedule, the second fleet of aircrafts will arrive in November in time for the launch of the first intercontinental route in December 2020.

According to the Airline, there is no financial pressure since they received all the money required for this phase of the development plan.

Payments for the wide body fleet are up to date with a final payment of $17 million pending for the two aircrafts.

Uganda Airlines is the second operator in East Africa to have ordered Airbus revamped A330 twinjet.

Covid-19 crisis
The Covid-19 crisis has impacted global air travel as countries shut their airspace and impose internal lockdowns.

In the region, Kenya Airways (KQ) last month suspended flights on its Rome –Geneva routes in response to the corona virus outbreak. In statement, the national carrier said the suspension was effective March 13, 2020 till April 30-2020.

“We shall rebook customers on alternative flights, extend full refund to those who would like to cancel their travel or waive booking fees for those willing to reschedule their flights” said KQ.

In Rwanda, all arriving and departing commercial flights were suspended last month beginning March 21, 2020 to curb the increasing cases of corona virus infections in the country.

Initially, RwandAir had suspended flights to and from China the first country to be hit by COVID-19 Israel and India, a decision that was taken few days before infections were reported in Rwanda.

Global industry
The Global Airline industry recently said it will need up to $200 billion in emergency support as the international travel industry continues to bleed cash in the face of the global lockdown.

The International Air Transport Association (IATA) said majority carriers face running out money within two months because of the sudden halt in the international flights by governments attempting to contain the coronavirus outbreak.

Arrival of new aircraft disrupted
Arrival of the A330-800 Neo pushed. Uganda Airlines is facing difficult decisions over the delivery timetable for its A330-800 neo fleet, which had been brought forward from the initial December 2020 date for the first aircraft, to October 2020.

The second aircraft would follow a month later, with launch of the first intercontinental route tentatively planned for December.

The question facing the airline now is whether to go ahead and receive the aircraft and park them at Entebbe, or postpone the deliveries.

Sources familiar with the situation say the carrier which started commercial operations six months ago, had brought forward the delivery dates after Finance Ministry frontloaded the bulk of resources required for fleet development, leaving the airline with a final payment of just $17 million on the two aircraft.

Additional reporting by Michael Wakabi