KAMPALA, Uganda — The government of Uganda is carrying out consultations on the reviving Uganda Airlines which was liquidated in 2001.
The main reason for its demise was high running costs and a relatively huge debt burden the government could not service quick enough.
According to the State Minister for Transport, Stephen Chebrot, a Cabinet paper has been developed for further consultation with different interested parties to pave a way forward for the return of Uganda’s national carrier.
Chebrot said last week: “We developed a Cabinet paper consulting with other friends in Cabinet for their support towards the revival. It also has a design of what we think the new airline will look like.”
Uganda Airlines, under the Uganda Airlines Corporation, was the flag carrier of Uganda. It was established in 1976 amidst strained relations between Kenya, Tanzania and Uganda that made up the former East African Airways. The late Idi Amin made sure the airline got off the ground in 1977 with Entebbe Airport as its hub.
Referring Commenting on the issue, an official with Ethiopian Airlines said, “The government does things that benefit the nation. To us it’s a good idea which will boost passenger movement, fair competition, investment as well as tourism growth.”
Chebrot said the revival will not solely be based on profit maximization, but also as an infrastructure to support air travel.
Uganda has had a sharp increase in the number of passengers transiting at Entebbe International Airport. The numbers hit 1.3 million passengers in 2012.
However, these numbers pale in comparison to Nairobi’s Jomo Kenyatta International airport in Kenya and the Julius Nyerere International Airport in Dar es Salaam that get above four million passengers annually.
Chebrot was hopeful the expansion of Entebbe airport both in cargo handling and passenger terminals, will attract other airlines to the country and push passenger numbers up.
He said the International Air Transport Association (IATA) projects a 4.5% growth in passenger markets and a 1.4% growth for cargo demand worldwide.
“It means a profitability leap from $6.7 billion or 1% net profit margin in 2012 to $8.4 billion or 1.3% net profit margin by end this year,” Chebrot said.
In 2012, international passenger demand grew by 6% with strongest growth recorded in the Middle East, Latin America and Africa.
“We are also willing to take up public private partnerships for the expansion of the airport and revival of Uganda Airlines,” the minister said.
In October 1988 a Uganda Airlines Boeing 707 plane crashed near Rome leaving 31 dead, but services resumed with a leased aircraft, flying to Dubai and Nairobi. These flights were discontinued in late 1989.
Attempts to privatise the airline failed to materialize and the government decided to shut down the carrier to and stop further cash subsidies.
“Uganda has since opened up its skies. Our belief and policy is in providing as many alternative routing as possible for the travelling public,” Chebrot said.
Vivendra Lochan the chief operating officer of the Association of Airlines in South Africa warned national carriers from flying unprofitable routes because this cannot be sustainable.
He advised airlines to focus on cargo transportation as its revenues have surpassed those of passenger travel.
