The National Airline: Challenges and opportunities

By Samson Rwahwire
 
The revival of the national airline is in high gear, this is as a result of the repeated calls from a section of the society and the Executive having goodwill to revive Uganda Airlines. Some of us who were born in the early eighties took a great deal of pride in state companies.

While growing up at the Naguru Housing Estates, I was thrilled to know a neighbour was an employee of Uganda Airlines; Entebbe Airport was a dream place. The thrill of the roaring jumbo jets made us gaze up to the skies and watch the gigantic Sabena airlines cruise. It always made our hair stand on end! I should say, my selection of a course in Aeronautics was shaped by the pride we had that Uganda had an airline. Uganda Airlines was indeed the pride of the pearl of Africa.
 
Uganda Airlines started operations in 1977 during the Amin administration and was liquidated in 2001. What has the country generally lost? First and foremost, it is worth mentioning that the majority of countries in Africa and possibly in the world have national carriers with ownership ranging from private entities to a majority or minority state ownership shareholding.

In Africa about 47 out of 54 countries own airlines or have a majority shareholding or minority shares in designated national airlines or flag carriers. The benefits of having a national carrier cannot be underestimated. The benefits achieved by Kenya, Ethiopia, Egypt and South Africa through their respective airlines are there for any interested party to see. In the East African region only Uganda lacks a national carrier; even young Rwanda has a high flying Air Rwanda.
 
Let's first study the tourism numbers, according to the World Tourism Organization, the most visited countries in 2015 by international tourist arrivals in order are: France, United States, Spain, China, Italy, Turkey, Germany, UK, Russia and Thailand. International tourism receipts grew to US$1.26 trillion in 2015, corresponding to an increase in real terms of 3.6% from 2014.

The World Tourism Organization reports the following African countries, South Africa, Morocco, Tanzania, Mauritius, Tunisia, Uganda, Sudan, Botswana, Zimbabwe and Ghana as the top ten tourism earners for the year 2015. It's evident that the billions of dollars raked in by tourism are also shared by the national carriers of the respective countries.

Of the top largest airlines by passengers carried, four of them are based in United States; three of them are based in China. Well here we could argue that US and China are vast territorial countries. The list is also populated by Irish and UK low cost budget airlines Ryanair and Easyjet making it to the top ten respectively. When it comes to fleet size, still five out of ten are based in US, China has two, Germany, France and Canada with their respective national carriers Lufthansa, Air France and Air Canada making it to the top ten. In terms of the countries visited by airlines, the top four airlines are national carriers namely Turkish, Lufthansa, Air France and Qatar Airways. It's evident that a functional national carrier spurs growth in tourism which is a multiplier effect in the profitability of the airline business.
 
An airline business needs top management; aviation is a highly volatile business and needs great care and handling. The main reason why most of national carriers have gone under is mismanagement. I don't want to speak about US or UK which have no state owned national carriers, these are developed countries which can't be compared to a least developed country like Uganda. Besides those countries already rake in billions of dollars and pounds respectively from the various tourism, educational and health facilities which we don't have in Uganda.

So comparing Uganda with US and UK not owning an airline is myopic in the business sense! Uganda definitely needs an airline, it definitely needs a national carrier, however, there should be the strong will in the government to oversee success of the industry.
 
Before the expansion at Entebbe airport, it was likened to a rural airport in developed countries. With the anticipated flow of oil cash, the President has time and again stressed that infrastructure will be the top priority, there's need to construct a bigger regional hub to tap into the resources and also attract global carriers.

If we study the model of Abu Dhabi and Dubai, the latter started Emirates airlines and has made Dubai a top tourist destination which was actually a territory of sand dunes and now it's a flourishing metropolis. The former started Etihad airlines and is racing towards catching up with Dubai. These two are using oil dollars to change the destiny of their provinces. We can also achieve the same with the oil resource.

The tourism hotspots need to be renovated, when a tourist lands in Kampala, what should be our hotspots? Emin Pasha House, August House, Independence monument or Kasubi tombs? We need to set up tourist hotspots across the country. Most major cities in the world have zoos, a good example is the Singapore zoo. Uganda would have to visit some of these city zoos and understand how we can utilize our God given natural resource in attracting tourists.
 
On one of my trips to an academic conference, I used Egypt Air. Unfortunately, it turned out that the visa to my destination was to be activated the next day; to the amazement of myself and my fellow travelling colleagues Egypt Air booked us into a five star hotel in Cairo worth over 200 euros a night with full board!

Imagine our joy at receiving such a treat from a national airline!! Well I later found out that the airline had put us up in a state owned hotel. During that day long stay in Egypt, we decided to visit the pyramids. This we did and also hired horses to ride to Giza. These activities were not free, we dug into our pockets for the experience. Looking back, initially we thought we had been given a free treat to a five star hotel, but in the end we spent more than the 200 euros offer because we left more dollars in Egypt as tourists because we hired a cab, horses, paid entrance fees, bought souvenirs etc. Now that is what is called marketing, and it is no secret that Cairo International Airport with its new International terminal is miles ahead of even European and US airports. Egypt receives millions of tourists because they have the infrastructure, an airline and the tourist hotspots.
 
A national carrier will need the skills base. It's unfortunate that the country's school of aviation isn't performing as it's supposed to be. The East African School of Aviation would play a major role towards the positive functioning of the national carrier. As a person who has worked as an aircraft maintenance engineer, Uganda has maybe not more than five qualified and experienced aircraft engineers with the capacity to support maintenance of Boeing and Airbus fleet.

Even the fleet used by defunct Air Uganda used to be maintained by expatriates from France and Italy. We need to mitigate this through high level training, this is where the oil dollars can go to revamp the East African School of Aviation and probably turn it into an Aviation Institute offering aviation/ aeronautical degrees in the region.

 A couple of Kenyan Universities are running undergraduate degrees in aviation and aeronautical engineering because of the availability of Kenya Airways and a host of other airlines.

Uganda on the other hand is lagging behind with only Eagle Air to show and no university offering aviation/aerospace engineering discipline. Government needs to engage the experts, people like Cpt. Rubombora of Eagle Air and myself can have the needed input in revitalizing the aviation sector and the aviation school.

Last but not least, an article in Handshake, IFC's quarterly journal on PPPs, points out that overregulation, overstaffing, excessive debt, political interference and poor management are all too common which lead to the downfall of national carriers. The author also proposes that a major precondition is having a strong champion in government and a genuine wish for reform. It helps to get the tourist industry on board more competition means lower prices and more tourists.
 
Dr Samson Rwahwire holds a Master in Mechanical & Aerospace Engineering; PhD in Materials Engineering and is a Senior Lecturer, Faculty of Engineering - Busitema University. He is also a member of the Critical Thought Group.