AIRLINE UPSTARTS WOES – WAITING FOR PASSENGERS AND PROFITS
(Posted 22nd May 2019)
(The Uganda Airlines Bombardier CRJ900 seen in Cape Town while making an
appearance before delegates of the recently held #AviaDev2019 Conference)
News have emerged from Kampala that officials of newly formed Uganda Airlines, while appearing before a Parliamentary Committee and defending their budget application for 575 billion Uganda Shillings, admitted that they expect profitability to only kick in ten years from now.
Members of the committee took issues with the very large budget while in related news information emerged that government said they had no money to pay for an increase in teachers salaries.
One of the members reportedly queried the salaries of pilots, given that the airline wasn’t flying as yet, purportedly pegged at 48 million Uganda Shillings a month for captain ranks.
Officials appearing before the committee, including the Permanent Secretary in the Ministry of Works and Transport Mr. Wasswa Bageya, were then asked to provide further information on how they arrived at various budget items, including ground handling estimates before the committee could deliberate behind closed doors to what extent they would sanction expenditure.
It was not immediately clear if the budget presented also contained funds for the payment of two additional Bombardier CRJ900 aircraft on order, or the payments for two Airbus A330-800NEO’s.
Uganda Airlines, when finally taking to the skies, will face overwhelming competition in the skies from government subsidized airlines like Air Tanzania and RwandAir but also from perennial lossmakers Kenya Airways, neither of which can afford to lose passengers to another upstart while at the same time being able to offer network connections and frequent flier programmes in the case of Kenya Airways and RwandAir while Uganda Airlines has to start off with a limited set of point to point connections.
In a related development it was also learned that Entebbe International Airport is not geared up to cater for connecting traffic which at present forces connecting passengers to obtain – where necessary – transit Visa, exit the airside and then check in once again. This, if not urgently addressed, will give Uganda Airlines a competitive disadvantage should any passengers wish to travel with them via Entebbe to their final destination, i.e. from Juba to Entebbe and then onwards.
