Uganda Airlines ready to take-off - Daily Monitor

Uganda Airlines ready to take-off

Sunday August 26 2018

Uganda Airlines ready take-off

New. How the new Uganda Airlines A330-800neo, the new version of A330, will look like. COURTESY PHOTO/Airbus. 

By ISAAC MUFUMBA

Christmas is coming early. That is if a report carried by Aviation24.be, a website that focusses on news in the aviation industry and comments by the Minister of Works, Ms Monica Azuba, are anything to go by.

Four jets that government ordered from Bombardier and Airbus will take to the skies in December.

If it happens, QU – the defunct airline’s flight code – will be returning to the skies 17 years and seven months after Uganda Airlines was liquidated and more than 18 years since the last of its jets was sighted. The last plane, a 44-seater Fokker Friendship (F27), was sold to Avtrade on October 13, 2000.

Rationale
The National Development Plan (NDPII) listed revival of a national airliner as third on a list of six public investment projects lined up for implementation in the air transport sector in the period between 2015/16 – 2019/20.
The argument was that it would “facilitate the development of Entebbe International Airport into a hub”.
The NPA, which undertook an in-house study and developed a feasibility study initially put the required capital outlay at $400 million (Shs1.5 trillion).

On June 23, 2016, as Mr Museveni made his maiden speech to the Cabinet he formed after winning a fifth term in office, he made the airline one of his priorities, saying lack of one was taking a toll on travelling Ugandans.
“Ugandan travellers are suffering because of, apparently, not having a national airline… I did not care much about a national airline. I thought that our brothers in Ethiopia, Kenya, South Africa, and others having airlines would serve all of us. That, however, is apparently not the case,” he said then.

At the time, Mr Museveni believed that Ugandans annually spend $420 million (Shs1.6 trillion) on travel, the bulk of which was going to foreign operators. This, he said, was a foreign exchange hemorrhage that a national carrier could stop.
Other considerations included, among others, the promotion of tourism, branding and marketing Uganda as an investment destination, stimulating economic growth by creating jobs and revenue for government, promoting export trade and reducing domination of the airline trade by foreign operators.

Expensive tickets
The outgoing chairman of the East African Business Council, Mr Mwinerugangura Kabeho, argues that lack of a national carrier has opened up Ugandan travellers to exploitation.

“The price of tickets here is the highest in the World. It is cheaper to fly to Dubai than to Burundi. A flight from Entebbe to Dar-e-salaam costs as much as one from Entebbe to Johannesburg,” he says.
As of Wednesday, the cheapest tickets on offer from Kenya Airways were ranging between €218 (Shs951,285) and €414.61 (Shs1.8m) for a return flight from Entebbe to Nairobi booked over a one week period, while Rwanda Air was charging between €347.41 (Shs1.5m) and €518.60 (Shs2.2m.)

With Fly Dubai Airline charging between €542.16 (Shs2.3m) and €698.53 (Shs3m), Kenya Airways charging between €517.07 (about Shs2.2m) and €641.15 (Shs2.8m) Ethiopia Airways charging €556 (Shs2.4m) and Oman Air €651 (about Shs2.8m) for a flight from Entebbe to Dubai, it is evident that travellers doing the trip to Dubai sometimes pay either the same amount for the 3,730km journey as those travelling to Nairobi, a distance of 521kms.

At the same time, Kenya Airways was charging between €423.40 (Shs1.8m) and €544.40 (Shs2.3m) for tickets for flights between Entebbe and Bujumbura, while Rwanda Air was charging €509.89 (Shs2.2m).
Kenya Airways was charging between €235.76 (Shs1m) and €294.76 (Shs1.3m) for a flight ticket for Entebbe-Johannesburg, which shows that it is much cheaper to travel to Johannesburg, a distance of about 2,940kms, than it is to travel to Bujumbura or Nairobi, which are 514kms and 521.26Kms away.

Impact on Aviation Industry
Capt Francis Babu, a former Uganda Airlines pilot, says the aviation industry always has a snowball effect on entire economies.

“Aviation is a high profile industry and it is also a very strategic one. It has capacity to impact on a country in so many ways. It creates direct employment and enhances other industries. Every discipline has a place in the aviation industry,” he says.

He thinks once the airline is back, it has capacity to create hundreds of jobs in direct and indirect employment, while other operations such as cargo and ground handling services and in-flight catering services are also expected to have a multiplier effect on the economy.

Action so far
“In these five years, Uganda will encourage the setting up of a national airline,” Mr Museveni told his new Cabinet in June 2016. That sparked off a flurry of activity.

On August 1, 2017, Mr Museveni named a taskforce composed of technocrats from the ministry of Works, aviation experts and pilots and charged them with developing a business plan and roadmap.

According to the brief that minister Azuba gave the media last month, the team was also charged with, among others, undertaking an economic and risk assessment, identifying a business and operational model.
On December 22 last year, Cabinet approved a detailed business and implementation plan and gave the team the nod to embark on the process that would actualise the plan. This occasioned engagement with various aircraft manufacturers, presentation of submissions to the government contracts committee, among others.

In March, government signed Memorandums of Understanding with the suppliers and paid commitment fees amounting to $400,000 (Shs1.5 trillion) to Bombardier and $800,000 (Shs3 trillion) to Airbus Industries to start the manufacturing process.
“Payment of the commitment fees was followed by preparation of detailed bid documents, which were shared with the two firms. Negotiation of purchase agreement for (four) Regional Aircrafts with Bombardier has been concluded and the agreement signed thus paving way for payment of the pre-delivery money. The one with Airbus is yet to be concluded,” minister Azuba told the media last month.

Planned routes
According to a copy of the National Airline Business and Implementation Plan, an analysis of the 2016 traffic showed the biggest number of Ugandans travelling in Africa visited Nairobi, followed by Kigali, Johannesburg and Juba. It is to those destinations that flights have been planned with the CRJ900 aircrafts.

The plan, however, points at the possibility of opening up routes, to among others, Mombasa, Khartoum, Mogadishu, Kinsasha, Lubambashi and Goma.

An analysis of intercontinental travel revealed that the top 10 destinations were Dubai [United Arab Emirates], London [United Kingdom], Mumbai [India] and Guangzhou [China], which accounted for about 60 per cent of the traffic.

“The initial long-haul network for the airline is, therefore, based on flights to these key points, with the market size being used to determine the aircraft capacity required. As already discussed above, these routes will be launched using the Airbus A330-800Neo aircraft, configured in a three class lay-out as per market requirements with feed from the short-haul intra-Africa regional network,” the plan document reads in parts.

However, in order to develop other routes, government will sign several Bilateral Air Service Agreements (BASAs) or Air Transport Agreements (ATAs) and also enter code sharing agreements in order to grow the business.

BASAs and ATAs are agreements in which two nations allow international commercial air transport services between their territories. Once signed, they are registered with the International Civil Aviation Organisation (ICAO) and entered into the Database of Aeronautical Agreements and Arrangements (DAGMAR).

The BASA/ATA spells out the conditions under which airlines are granted economic rights to fly between two countries by detailing things such as frequency of travel, tax issues and types of crafts to be operated.

Code sharing agreements allow two or more airlines to share information on one flight. If, say Uganda Airlines and Kenya Airways have such an agreement in place, Kenya Airways would be in a position to sell a seat on a Uganda Airlines flights and vice versa. If that were to happen, a ticket from Uganda Airlines on a Kenya Airways flight is likely to show the words, “operated by Uganda Airlines”.

Kenya Airways already has code sharing agreements with several airlines, including the Air France-KLM group, Oman Air and Air Mauritania.

One of the targeted markets for the airline are government officials. The problem is government is not a good debtor. That is why many companies and individuals who have done business with it are bankrupt. It was the same with the defunct Uganda Airlines, which was owed billions of shillings by government in unpaid for tickets.

So while optimism is very high that the flag carrier will soon be back in the skies, so are fears that the vampires that sucked the blood out of Uganda Airlines are lurking in the dark waiting to pounce again.

UNEASE IN CABINET

Noise of manufacturer. However, sections of the public have been questioning government’s decision to buy Bombardier and Airbus aircrafts instead of going for Boeing.
Earlier in the year, Mr David Basobokwe, who had put in 30 years of work in Uganda Airlines and Das Air Cargo before moving to England, had accused government officials of going about the rebirth of the airline the wrong way.
“They have decided to buy four Bombardier CRJ aircrafts to do internal and external flights. Those aircrafts are too many for the job. Two planes can fly in a day and finish (sic) South Africa and East Africa so you don’t need four. Secondly, I don’t understand what informed them to buy four Bombardiers and two airbuses,” Mr Busobokwe said in an interview that was carried in the Sunday Monitor.
His concerns spread to Cabinet, which tasked minister Azuba to explain why Boeing had been ditched; why the Airbus A330-800 series were chosen and why government opted to purchase instead of leasing the planes. According to Ms Azuba, those matters were put to bed on July 9.

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