Uganda to get national airline
Nov 30, 2005
Uganda has entered into an agreement with South African-based Arch Airways to form an airline company that will become the national flag-carrier, reviving hopes that there will be a new flying crane on the runways.
By John Odyek
Uganda has entered into an agreement with South African-based Arch Airways to form an airline company that will become the national flag-carrier, reviving hopes that there will be a new flying crane on the runways.
The airline company, Victoria International Airline Uganda, has been registered and is expected to be in the sky by early next year.
Prof. Semakula Kiwanuka, the state minister for finance, told journalists yesterday that Uganda would be a 25% shareholder in the national carrier.
He said the Government would contribute US$250,000 (about sh500m) for the shares. This was at a press conference at his office in Kampala.
Kiwanuka said the airline would start flights in February with a Fokker Friendship plane. The 130-seater passenger plane will initially fly in the region and target destinations such as DRC and West Africa. He said the company was due to acquire a bigger MacDonald Douglas, a 160-seater plane.
“This means a lot to us. We have not had a flag-carrier for over 10 years. We are the only country in the region without a flag- carrier. Uganda will be represented on the board of directors of Victoria International Airline,†Kiwanuka said.
Semakula said the Civil Aviation Authority had done a due diligence on Arch Airways and certified that they could do business here.
He said the ministry of justice, through the attorney general’s office and ministry of works were working to see that the airline takes off.
Semakula said Arch Airways would pay the remaining 75% shares worth US$750,000 in Victoria International Airline Uganda.
Arch Airways is composed of South African and Swiss businesspersons. The minister said the Uganda shares were discounted from US$500,000 (about sh1b).
On Tuesday President Yoweri Museveni met Andy Kunz, chairman of Victoria International Airline, to discuss the potential to do business in Uganda. Semakula attended the meeting at State House, Nakasero.
Semakula said Museveni was expected to give a directive to the finance minister Dr. Ezra Suruma to pay for the shares either this year or in the next financial year.
The Uganda Airlines Corporation was put up for privatisation under Class 2 of the Public Enterprise and Divestiture Statute in 1998.
This meant government would maintain majority shares in the company during privatisation, while an investor would buy a significant portion of its shares. The remaining shares were to be sold to Ugandans through the Uganda Securities Exchange.
South African Airways (SAA) in 2001 were selected as winning bidders to buy shares in Uganda Airlines, which was then in an acute financial crisis and had no plane.
However, MPs insisted that if Uganda Airlines was to be privatised, for the sake of maintaining national pride and sovereignty, it should maintain the code QU if the SAA took over.
SAA, which was facing changes in shareholding at home then, eventually pulled out of the deal, citing frustration.
SAA wanted SA Alliance Air to be the buyer of shares in the Uganda Airlines Corporation. SA Alliance was owned 30% by Tanzania, 30% by Uganda and 40% by SA business vehicle Transnet.
The minister said Victoria International Airline could not be called Uganda Airlines Corporation because the corporation had not been fully liquidated.
Uganda has entered into an agreement with South African-based Arch Airways to form an airline company that will become the national flag-carrier, reviving hopes that there will be a new flying crane on the runways.
The airline company, Victoria International Airline Uganda, has been registered and is expected to be in the sky by early next year.
Prof. Semakula Kiwanuka, the state minister for finance, told journalists yesterday that Uganda would be a 25% shareholder in the national carrier.
He said the Government would contribute US$250,000 (about sh500m) for the shares. This was at a press conference at his office in Kampala.
Kiwanuka said the airline would start flights in February with a Fokker Friendship plane. The 130-seater passenger plane will initially fly in the region and target destinations such as DRC and West Africa. He said the company was due to acquire a bigger MacDonald Douglas, a 160-seater plane.
“This means a lot to us. We have not had a flag-carrier for over 10 years. We are the only country in the region without a flag- carrier. Uganda will be represented on the board of directors of Victoria International Airline,†Kiwanuka said.
Semakula said the Civil Aviation Authority had done a due diligence on Arch Airways and certified that they could do business here.
He said the ministry of justice, through the attorney general’s office and ministry of works were working to see that the airline takes off.
Semakula said Arch Airways would pay the remaining 75% shares worth US$750,000 in Victoria International Airline Uganda.
Arch Airways is composed of South African and Swiss businesspersons. The minister said the Uganda shares were discounted from US$500,000 (about sh1b).
On Tuesday President Yoweri Museveni met Andy Kunz, chairman of Victoria International Airline, to discuss the potential to do business in Uganda. Semakula attended the meeting at State House, Nakasero.
Semakula said Museveni was expected to give a directive to the finance minister Dr. Ezra Suruma to pay for the shares either this year or in the next financial year.
The Uganda Airlines Corporation was put up for privatisation under Class 2 of the Public Enterprise and Divestiture Statute in 1998.
This meant government would maintain majority shares in the company during privatisation, while an investor would buy a significant portion of its shares. The remaining shares were to be sold to Ugandans through the Uganda Securities Exchange.
South African Airways (SAA) in 2001 were selected as winning bidders to buy shares in Uganda Airlines, which was then in an acute financial crisis and had no plane.
However, MPs insisted that if Uganda Airlines was to be privatised, for the sake of maintaining national pride and sovereignty, it should maintain the code QU if the SAA took over.
SAA, which was facing changes in shareholding at home then, eventually pulled out of the deal, citing frustration.
SAA wanted SA Alliance Air to be the buyer of shares in the Uganda Airlines Corporation. SA Alliance was owned 30% by Tanzania, 30% by Uganda and 40% by SA business vehicle Transnet.
The minister said Victoria International Airline could not be called Uganda Airlines Corporation because the corporation had not been fully liquidated.