UG@59: Uganda's aviation industry cuts travel costs

On April 16, 2019, the newly revived Uganda airlines received its first set of two Bombardier CRJ900 planes, out of the four it had ordered, as the carrier got equipped to return to the skies after nearly a decade of absence.

Eight months later, the first of its two state-of-theart A330neo aircrafts was also delivered by French aircraft builder, Airbus, bringing its fleet to five.

The national carrier’s fleet later expanded to six, when Airbus delivered the second A330 aircraft, known for its comfort and efficiency, amidst joy and celebrations among sections of Ugandans.

The revival of the airline, experts say, has given a great thrust to Uganda’s economic growth ambitions by facilitating transport and tourism, which are the country’s main forex earners.

The airline is also expected to enhance the country’s competitiveness by reducing the cost of air transport and easing connectivity to and from Uganda. According to the Civil Aviation Authority (CAA), the country was losing approximately $540m (about sh1.917 trillion) annually in form of high transport costs mostly resulting from extra charges to passengers moving in and out of Entebbe.

Transport state minister Fred Byamukama says the airline is already helping the country to promote tourism and fully exploit opportunities in agriculture, minerals and oil and gas.

He says the revival of the national carrier will push tourism’s potential to its peak by enhancing direct flight to Uganda, especially for tourists. He says the potential for aviation growth in Uganda is reflected in the fact that Entebbe international airport has reached its capacity.

“Although its return was punctuated by the COVID-19 pandemic, we are optimistic that things are okay for now. The carrier will give us the much-needed mileage to compete economically on the world stage and create more visibility for the country,” he says.

As a show of its resolve to concur the skies, the airline also signed interlines agreements with different airlines as it finds its footing in the aviation industry, with the expected launch of long-haul flights.

An interline agreement is a relationship between airlines that allows one airline to sell services to a customer, ordinarily provided by another airline. Airlines use these agreements to sell routes that they would otherwise not be able to serve alone.

The carrier signed these agreements with Emirates, Qatar and KLM airlines. According to Byamukama, the national carrier is expected to launch direct inter-continental flights to Europe, Middle East and Asia with targeted destination cities of London, Dubai, Mumbai and Guangzhou.

Already, the carrier recently signed an agreement with Hahn Air and APG Airlines, allowing the two to be used as plating carriers in markets where Uganda Airlines does not have reach. This means that the two airlines issue tickets on behalf of Uganda Airlines.

HISTORY

Uganda Airlines kick-started air operations in 1977 with an initial share capital $70m and comprising of 15 carriers routing through Africa, Middle East and Europe. It initially operated under East African Airways, but after the collapse of the East African Airlines, it continued operations as Uganda airlines until the mid-1990s when it ran into severe problems that culminated into liquidation in May 2001.

MORE OPPORTUNITIES
According to Byamukama, the Government has resolved to develop the aviation sector, to optimally tap opportunities arising from the increasing number of passengers across the continent.

He says following recent changes and repairs, for instance, the Entebbe airport is rising from slumber, with passenger numbers increasing by 34% in August, having tumbled 71.5% in 2020 at the heat of COVID-19. In August, he says, Entebbe recorded 81,968 international passengers, while 5,154 metric tonnes of cargo were recorded.

Currently, the airport is undergoing a $200m expansion in a phased manner to accommodate the rising passenger numbers and cargo traffic. According to UCCA, a number of changes have been effected at the airport since 2007, when the expansion project kicked off.

Vianney Lugya, the CAA publicist, says already refurbishment of a VVIP facility, along with its Aircraft Parking Apron 2 and Aircraft Parking Apron 4 was completed to visiting heads of state and other important dignitaries.

He says the construction of a new 100,000 tonnes cargo centre as part of the overall upgrade and expansion of Entebbe International Airport is almost complete, along with the fuel hydrant line and fuel firm.

“The facility is fitted with the most advanced aviation fuel operation equipment and technology. On completion, the storage capacity will be 23 million litres.

Initially, capacity will be enhanced from the current 7.5 million litres to 16.5 million litres,” he says. He says strengthening of runway 17/35 and its associated taxiways has been completed, while runway 12/30 is about 98% complete.

According to Lugya, expansion of the passenger terminal building has also taken shape, with the departure area already in use and soon people will have access to the departure road and dropoff passengers by the terminal access.

AUTOMATION
In terms of automation, the airport has seen changes occasioned by $9.5m project partly funded by the Korean government, to improve air traffic management, flight procedures, supply and installation of training equipment, and the terminal operations control centre.

It should be noted that in 2014, the authority formulated a 2-year master plan running up to 2033, part of which included the revival of the national airline and expansion of the Entebbe airport.

The plan also included the construction of the Hoima international airport and expansion of four other regional airports. According to Lugya, the first of expansion works at Entebbe International Airport is on schedule and is expected to be completed by year end.

The construction works on the Kabale International Airport in Hoima currently stands at approximately 75% and the airport is expected to be completed by 2023. He says the Government is also in the process of constructing and upgrading other regional airports and aerodromes, to match the current and anticipated growth in air transport.

Thirteen (13) aerodromes have been rehabilitated countrywide and the expansion of the Entebbe International Airport and the construction of the Kabale International Airports are progressing as scheduled.

“Already, progress at the Entebbe airport is good and we are happy, but also we have registered tremendous success in Hoima, where we are building an airport to support the oil and gas sector,” he said Lugya says more than 90% of air traffic for any country is determined by the size of the economy measured by Gross Domestic Product (GDP).

He says, over the years, as the economy continues to grow, air traffic has also grown and more air operators have continued to throng Uganda’s air space. According to the World Bank senior economist for Uganda, Racheal Ssebude, Uganda needs an efficient transport system that facilitates domestic, regional and international connectivity to support its growth agenda.

A recent report by the International Air Transport Association (IATA) indicates that the African region air business has great potential, given that more Africans are opting to fly and the numbers are expected to grow by 5% every year for the next 20 years. However, the report says the business has lately registered low passenger volumes since the onset of the COVID-19 pandemic.

Meanwhile, the East Africa Business Council (EABC) is calling on regional states to adopt the open skies policy to improve the consolidation of EAC exports to overseas markets.

They say this would greatly aid recovery of the tourism, hospitality and transport sectors that have been highly impacted by the COVID-19 pandemic. According to the EABC chief executive officer, John Bosco Kalisa, the regional states have lost upwards of $4b (about sh14.2 trillion) of international tourism receipts over the last 12 months.

Kalisa said liberalization of the airspace (open skies) would lower the airfare by approximately 9% and stimulate passenger demand by more than 14%. In 2015, the African Civil Aviation Commission and IATA commissioned a study on the benefits of full air transport liberalisation among East African Community partner states.

The result indicated the move would add $202m to the regional GDP per annum, increase traffic by 46%, reduce fares by 9% and increase frequency by 41%. Kalisa says, presently, flying in the region is considered a massive undertaking, due to the high-ticket costs, compared to further destinations, like Dubai.

“This is why the board has directed us to champion the open skies policy because it will mark the end of the high air fares in the region,” he says. East African countries are among the 44 African states that committed themselves to liberalise the aviation industry, curb air taxes and offer qualifying airlines entry rights to reduce ticket prices, increase traffic and improve safety.

But almost 20 years later, many African countries, including those in the EAC, are yet to open their air space and instead rely on Bilateral Air Services Agreements (BASAs) with the view to shield their local carriers, denying passengers of low air fares.