Uganda Airlines on Monday took to the skies, entering an already congested market by other regional Airlines to Mombasa.
The new route is strategic in the sense that Uganda is currently the largest user of Mombasa port going by the latest statistics from Kenya Ports Authority (KPA).
Latest figures from the KPA 2017 annual performance report show that Uganda remained the leading Mombasa port user, with its import cargo rising steadily from 6.5 million tonnes in 2017 to 7.4 million tonnes of goods last year
Much as this offers a great opportunity for businessmen and tourists moving between the two countries, Uganda Airlines ought to be mindful of the fact that the aviation business can be very complicated.
The national airline now faces stiff competition not only from Kenya Airways, but also RwandaAir and Air Tanzania, all of which have invested in their “flag carriers” with little success compared to Ethiopian Airlines.
Despite three changes in chief executive officers in the last five years, Kenya Airways has struggled to turn in a profit. The company’s financials showed that Kenya Airways’ half-year loss more than doubled to KShs8.56 billion (Shs310 trillion), sinking shareholders into a deeper negative equity position of KShs16.18 billion (Shs586 billion).
The loss was pegged on increased operation costs in the wake of its expansion into new routes and the return of two Boeing 787 planes that had been sub-leased to Oman Air.
In short, it was a tough time for this regional airline after heavy investments in new aircraft failed to earn the expected profits.
So, Uganda Airlines should pick some lessons from Kenya Airways, which is still operating on many of the routes our national carrier plies. We must also remember that there are low-cost carriers such as Jambojet that have introduced cut-throat rivalry on some of these routes, which our national carrier operates.
Come November 25, regional low-cost airline, Jambojet, will start operating daily flights to Kigali, Rwanda. This will bring to three the total number of the airline’s international routes within the continent.
Uganda Airlines requires a unique strategy that will guarantee a high return on investment.