Monday, February 18, 2013

► UGANDA: Government in talks with Air Uganda over possible buy in as calls for establishment of national carrier grow louder.

The Ugandan Government has been holding talks with the Aga Khan Foundation, the 100% shareholder for Meridiana Africa Airlines (Uganda) Limited, better known as Air Uganda (U7), over a possible buy in to the carrier. Government's move comes as calls for the establishment of a new reliable national carrier to replace that of the defunct Uganda Airlines (QU), grow louder as biting global oil prices and a lack of domestic competition increasingly push the cost of Ugandan exports beyond being internationally competitive.

Air Uganda
Air Uganda CRJ200
Ugandan parliamentarians coupled with the Civil Aviation Authority of Uganda have added their voices to the chorus baying for the revival of Uganda Airlines. Uganda has in the past asked Ethiopian Airlines (ET) to assist it in re-establishing a new national flag carrier though no outcome on those talks has been made public.

As part of the country's "Uganda Vision 2040 National Development Plan" in which the creation of a "national carrier to increase connectivity to various destinations" is planned for, motions to resurrect the national carrier also received parliamentary support in September 2012 when a report by MPs involved in the Committee on Tourism, Trade and Industry recommended to Parliament that "Government should revive Uganda Airlines as one of the deliberate efforts to enhance the level of marketing the country internationally."

Traffic-wise, Uganda has seen continued sustained growth in terms of passengers using Ugandan airports. According to The Ugandan Monitor:
"Official figures show that the prospects are good because [the] aviation industry in Uganda maintained its growth trend last year, posting a 14.1% increase in passenger traffic - mainly driven by an increase in tourist arrivals.  Entebbe Airport registered 1.23 million international arrivals compared with 1.08 million passengers in 2011.  The year also saw a 15% increase in cargo volumes, with 55,908 tonnes handled last year compared with 48,636 tonnes registered in 2011. The airport currently hosts over 21 scheduled passenger airlines."
Source [The Monitor]

However, some parliamentarians have warned against making the same mistakes that lead to Uganda Airlines' bankruptcy in 2001 - mismanagement, corruption and political interference - and have instead urged government to consider "a completely new public-owned airline as the national carrier that is locally registered and that enjoys preferential rights or privileges accorded by the government."

Formed in 2007, Air Uganda began commercial operations on 15 November 2007. Its competition in Uganda comes from AeroLink Uganda, a subsidiary of Airkenya Express Limited in Kenya, and Eagle Air.