Pundits are wondering where the money would come from should this latest airline revival really take off.

REVIVING UGANDA AIRLINES – AGAIN ???

(Posted 11th August 2015)

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Information firmed up overnight that another attempt is underway to revive Uganda Airlines, which, stripped of key assets like ground handling and catering was liquidated in 2001. This followed attempts to privatize the airline but with back then the only viable asset being its ownership of money making Galileo Uganda – since then also hived off needless to say – were potential investors quickly drawing the conclusion that flogging a dead horse will not revive it.

The airline had survived reasonably well as long as it held the monopoly of ground handling in Entebbe but after being deprived of that cash cow following the formation of Entebbe Handling Services, in short ENHAS, was the writing on the wall that the end game had begun.

It is understood that the Uganda Development Corporation was now tasked by government to form a new national airline for Uganda, which saw its quasi national carrier Air Uganda brutally put to the sword in mid 2014, courtesy of either the incompetence of the Uganda Civil Aviation Authority or else, and here did conspiracy theorists just get new ammunition, as part of a greater scheme aimed to weasel up to half a billion US Dollars out of the already strained government coffers in another grand eating frenzy.

The time frame suggested to this correspondent by one of the ‘crafters’ involved of just six months is best described as overly ambitious. Given the run up time needed to get the required licenses, an AOC, route research carried out, traffic right approvals from third countries, aircraft procurement, employment of pilots – when there is a growing global shortage of trained skippers already – and the setting up of a competent administration, sales and marketing organization, among other challenges may reality by far exceed this target.

Neighbouring Kenya Airways has just recorded a major loss, the second in the past three years, and considering the moribund nature of Air Tanzania have several respected aviation voices in the region have called upon their governments to pool their relevant resources and make Kenya Airways officially a regional carrier, as it got the route rights, the fleet and an extensive network of destinations.

With the ongoing squabbles between Kenya and KLM, the second largest shareholder in Kenya Airways, over the present massive distortion of influence and voting rights on the board through the company’s Articles of Association which appear tilted in KLM’s favour – the Kenyan government is now by far the largest shareholder in the company and yet continues to be outvoted on board decisions – could it well be that regional governments might make a case to snap up these shares, which are near record low value, instead of sinking mega bucks into their own airline ventures which more likely than not fail, given the present market conditions.

While in Uganda voices have emerged condemning the entire privatization process of the 1990’s and are advocating a return of government into business, will this probably not go down well with tax payer associations and other watch dogs, cognizant of the fact that large state corporations have turned in the past into bottomless pits as far as money was concerned. No comments are offered about added conspiracy theories that the revival scheme is linked to the upcoming elections though several regular contributors made hay of that alleged connection.

Either way, this development will be closely monitored and the various steps followed, as it will of course be parliament which will require to vote on the appropriation of funds, estimated to be in the 200 million US Dollar region to start with and raised to more than twice that should the company indeed take off and then require additional planes.

Watch this space for breaking and regular aviation news from the region.