Is Uganda Airlines doomed to fail?
What you need to know:
- Lessons to learn. There are important lessons from the successful management of Ethiopian Airlines. Successive regimes in Ethiopia left the airline to be run profitably.
May be not. We hope it succeeds. Hope is one thing, facing up to the realities is another. There is great anticipation but also tremendous trepidation. After close to 20 years, Uganda’s national carrier, Uganda Airlines, is primed for revival.
In a few weeks, two Canadian-made small/short-distance aircrafts are scheduled to land at our only international airport, Entebbe, pushing us closer to a fully functional heretofore defunct national airline. For the patriot and optimist, the hope is that this doesn’t turn out as yet another bungled-up national project that falls afoul of the pursuit for personal fortunes, an all too pervasive phenomena in Uganda under the current regime. For the critic and sceptic, there are at least two sources of worry and reason to be wary.
First, commentators of various stripes, including many of us with no knowledge of the aviation industry, have underlined the rough market and stiff competition Uganda Airlines is jumping into. Apparently, national carriers across Africa have for long been struggling to post consistent profits. Instead, they are a drain on the taxpayer who covers the losses to keep the airlines running. I find this argument unconvincing.
There is a limit to how long and with how much a loss-making business, with no other value at all, can be sustained by injections of capital from State coffers. If national carriers from South African to Ethiopian and Kenyan have struggled yet survived, then surely Uganda Airlines too can struggle in the market and live on. Why not?
The second argument, made by those imbibed with exaggerated neoliberal inclinations, is that government shouldn’t be doing business because it has no business doing business. In any case, critics point out, government has shown in the past that it is poor at running viable businesses. We can separate two things here. It is one thing to have a government that is so incompetent as to efficiently supervise performing businesses, it’s another thing to say governments are necessarily poor at owning and presiding over public business ventures.
A state-owned enterprise like a national airline does not have to be directly managed by government officials. The government’s role is supervisory, managerial or technical. There is scarcely any reason why a publicly- owned business cannot be run on sound business thinking, competent management and prudent planning.
But not in Uganda. Not with the current regime of rulers, who uncannily manage State affairs opaquely, with blatant cronyism, glaring corruption and shameless nepotism. If Uganda Airlines, assuming it ends up being owned by Ugandans anywhere, is to run into trouble and go down the drain, it will be because of the usual malfeasance – flouting meritocracy, abandoning proper procedures and due diligence and accommodating political connections, nepotism and cronyism.
Uganda needed a national carrier yesterday. We are patently landlocked. A national airline can be handy, especially in situations of national emergencies. Also, if we are to confront the big challenge of economic transformation by maximising our enormous potentials in agriculture, extractives and value-added production, we have to deal with the costs of getting into foreign markets. A national carrier can play a role.
Through aggressive marketing and strategic foresight, the national airline can be a frontline tool in propelling our tourism potential. This can be done in closer collaboration and partnership with Uganda’s diaspora communities now scattered in increasingly large numbers around the world, especially in crucial city-hubs in the US and UK, who can benefit from reduced return airfares with group bookings.
And given that the current rulers either grabbed for themselves or sold-away to foreigners just about every key national asset, we can have something to collectively own as a country. If nothing at all, there is at least some national pride to savour. After all our hard-earned tax-money is commandeered by the rulers in all sorts of ways.
There are important lessons from the successful management of Ethiopian Airlines. Successive regimes in Ethiopia left the airline to be run profitably and prudently. From the Emperor Haile Selassie through the Mengistu military dictatorship to the current EPRDF regime, the airline has had limited interference from the political class: It’s run competently and professionally.
One last thing, Uganda Airlines Corporation was effectively shut down in 2001 after struggling for years. The decisive blow was when two powerful a political figure, Sam Kutesa, took over ground handling services, a crucial component for any national carrier. Unless ground handling is returned to Uganda Airlines, profitability will be difficult.
Dr Khisa is assistant professor at North Carolina State University (USA).