Reviving Uganda Airlines is money down a black hole

By Paul Busharizi

I see that a move to revive the defunct Uganda Airlines is gathering momentum in certain circles.

There are all the well-worn arguments for the plot; that the airline will bring pride to Uganda or that it will increase tourist numbers to the country or that passenger numbers into Entebbe have increased and this will make another airline more viable or (the most childish of the lot) that everybody has one, so we should have one too!
 

None of these answers even begins to answer the critical question: “What would a government-backed Uganda Airlines do for travellers that is not being done for them now?”
 

Uganda Airlines was wound up in 2001, after a failed privatisation attempt and the unsustainability of the huge cost of keeping it afloat — about $0m a month at the time. Incidentally, the privatisation of the airline was subverted by incessant sniping by a Parliament which also shelved several other projects like the initial Bujagali power project.
 

At the time, the airline was running a single Boeing 737 on the Entebbe-Nairobi route, with little to no hope of the fleet being expanded.
 

In the period since its closure, travellers in and out of Entebbe have more than tripled to 1.2 million last year. These are being ferried by the 20 or so airlines that now operate out of the airport.
 

One would like to believe the promoters of this scam — sorry scheme — would like to build a world class airline (otherwise where is the pride in a slap dash operation?) that will eventually reach as far and wide as the Ugandan traveller flies.
 

Apart from the fact that the Government doing business is a bad idea, it is that the Government would spend billions of dollars (not shillings) not only in setting such an airline up, but baby-sitting it to profitability over many years, even decades.
 

In a country like Uganda, where health and education services are inadequate to the point of hopelessness and our infrastructure is in dire need of repair and expansion, it does not take a Nobel prize in economics to see there are better, if not more profitable, ways to employ those billions. For us, opportunity cost is real, not just a theory in the text books.
 

We have been without an airline for a decade and Ugandan pride has not fallen as a result. People have continued to fly into the country, more so than when we had an airline and we do not need an airline to keep up in the mine-is-bigger-than-yours boyish games with our neighbours.
 

Ali Adel knows a thing or two about setting up airlines, having set up the award winning budget airline Air Arabia, and his experience is that it takes $50m to $200m to set up a budget airline. Setting up a regular airline, therefore, would cost multiples of that.
 

When asked what he would tell someone trying to start an airline, he said: “I would say do not do it,” going on to explain that an airline is more than just airplanes, having seats and ticketing.
 

“Your number one challenge is to gain credibility in the marketplace from the customers because there are a lot of airlines and you are coming in new, so why should people travel with you or trust you? That is always going to be the biggest challenge.
 

Second is traffic rights. Traffic rights are already allocated to all the airlines, people on the slot and everyone else, so why should you be getting a share of that cake when you do not have it now?

Another challenge is the ability to bring in so many different components of this business under one roof. One other challenge is finding the right talent to help you run the business. You need a very strong team to take this forward.”
 

But I am sure the people at Civil Aviation Authority and the transport ministry know all this and that I should be preaching to the converted. But apparently not!
 

Somebody once said something to the effect that in explaining the reason for war, there is always the stated reason and then the real reason. The stated reasons for this enterprise do not stand up to scrutiny — the proposed airline will add no value to the passenger experience at Entebbe, the real reasons we can only guess at.
 

On Wednesdays, within 30 minutes of each other, six airlines make arrivals, two of them being the larger airbuses of Emirates and Qatar airlines.

There are massive delays as our rudimentary airport struggles to process the passengers at lunch time on Wednesday. Clearing through Dubai airport, which sees more passengers going through it in a week than Entebbe sees in a year, is a comparatively quicker experience on any day.
 

If the Government feels that money is burning holes in its pockets, let it beef up Entebbe Airport’s capacity to handle the increasing number of passengers (And we are not talking about the perfunctory rehabilitation that was done for CHOGM), improve regional airports and market Uganda as a choice destination to attract more visitors.
 

Or maybe we should look deeper into the real reasons for this renewed clamour for the revival of Uganda Airlines?

pbusharizi@newvision.co.ug
Twitter: @pbusharizi