Aviation: While Uganda ponders Rwanda and Kenya dominates its Airspace

On September 28, a brand new Airbus 330-200 touched down at Entebbe International Airport from Paris, France. On the tarmac, at the airport, to welcome the new aircraft were several diplomats, Ministry of Works and Uganda Civil Aviation Authority (CAA) officials.

It cannot be mistaken to have been purchased by the Uganda government for the proposed revamping of Uganda Airlines. Instead, it was a RwandAir flight heading to Kigali but had to make a pit-stop at Entebbe International Airport. The Airbus 330-200 is the latest addition to RwandAir’s fleet that brings the number to nine.

Uganda is RwandAir’s most frequented destination. The airline operates four flights a day between Kigali and Entebbe. It also has three direct flights between Entebbe and Jomo Kenyatta International Airport in Nairobi.

In other words, it operates almost like Uganda’s national airline. Mr John Mirenge, the CEO Rwandair, speaking during the unveiling of the airbus at Entebbe International Airport, said they had applied to be given permission to use Entebbe as a hub to do direct flights to Europe beginning in November.

He said Uganda was a strategic partner in the aviation industry and has a lot of traffic which they would be able to tap into.

“Uganda has business people travelling to Europe and investors coming into the country,” he said.

The Uganda government officials reveal that any airline making an entry in the Ugandan market is due to the rising number of passengers and Uganda’s economy.

“The decision by RwandAir to add aircraft of the size of an Airbus A330-200 to the Entebbe route is a positive sign of air transport business viability on the route and a vote of confidence in Uganda’s air transport industry and the economy,” Mr David Kakuba, the deputy managing director of CAA said.

Similarly, Kenya Airways (KQ) also frequents Entebbe more than any other airline in the world. Uganda is one of KQ’s most lucrative markets with five flights a day to Entebbe International Airport but it is an expensive route. It still remains popular with several travellers despite the rather restrictive price on some occasions.

For instance, a flight booked on the same day (November 11, 2016) for both RwandAir and Kenya Airways has a price difference of $36 (Shs122,400). RwandAir’s pricing on the route for a return ticket is $314 (Shs1m) whereas Kenya Airways is $351 (Shs1.2m). The two airlines have dominated the route for the last two years.

Both Kenya Airways and RwandAir are benefiting from the lack of a national airline that uses Entebbe International Airport as its hub. In an interview with Daily Monitor at the start of 2016, Kenya Airways CEO Mbuve Ngunze did not seem enthusiastic about Uganda revamping its national airline.

“The government of Uganda has its own national interests on why it would start (revive) a national airline. My encouragement to the policy shapers should be how they could leverage other capabilities in the region that could serve the same needs, even better,” he said at the time

Filling the Air Uganda vacuum
In July 2014, Air Uganda, operating the former Uganda Airline code U7, was suspended from operations by CAA. By the time Air Uganda was suspended, it had started dominating regional destinations. It had flights to Tanzania, Kenya, Rwanda, Burundi, Somalia, South Sudan and Kenya. Using Entebbe International Airport as its hub, Air Uganda was competing with Kenya Airways in terms of reach within East Africa. It suspension meant that CAA had to distribute some of the codes to other players like Kenya Airways and RwandAir.

That explains why in January 2015, RwandAir started direct flights between Entebbe and Nairobi. This was because, with the exit of Air Uganda, RwandAir had managed to secure fifth freedom rights with Kenyan authorities. The development also follows a recent bilateral agreement between Rwanda and Kenya, allowing RwandAir and Kenya Airways fifth freedom rights between the Entebbe-Nairobi and Entebbe-Kigali routes.

Over the next few years, if Uganda does not operate its own national airline, RwandAir will operate at Entebbe International Airport as if it were their country hub. The airport is currently undergoing an upgrade valued at $324m (Shs1.1 trillion).

Uganda Airlines to spoil the party?
The government is working on reviving a national carrier for the country and a study and report have already been produced to that regard.

Mr Henry Aggrey Bagiire, the minister of state for Transport, speaking of the sidelines of the engineer’s forum last week, said there was a plan to revive the national carrier.
“It is a decision that was taken a short while ago at the beginning of this financial year following remarks by the President during his state of the nation address in June and he gave us the responsibility to pursue it as ministry of Works,” he said.

The minister also said that they put in place a task force – led by CAA – to study what model they can take, what kind of operation Uganda can have, and whether she can lease or buy the air crafts. The team finished its report and handed it over to the ministry of Works.

“We have finished the report and now have a Cabinet paper. By the end of this year, Cabinet will have pronounced itself on this,” he said.
Mr Ignie Igunduura, the corporate Affairs manager of Civil Aviation Authority (CAA), said they undertook a feasibility study and produced a report which was handed over to the ministry of Works for review. Details of the report are still embargoed.
This newspaper understands that by the end of the year, a decision will have been made by the government.

Is Air Tanzania coming back?
In the region, it is Uganda and Tanzania that have failed to maintain and operate an efficient national airline flying to international destinations. Uganda Airlines was the first to collapse in 2001 due to mismanagement by the government. Air Tanzania ventured into a partnership with South African Airways (it had a 49 per cent in Air Tanzania) between 2002 and 2006. In 2007, the relationship went sour, forcing SAA to pull out.

Currently, Air Tanzania only plies domestic in Tanzania with no regional presence. Kenya Airways, through Precision Air (a public listed airline in Tanzania where Kenya Airways has a 41 per cent stake), in 2003 started competing with Air Tanzania on regional routes.

Source: allafrica.com

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