The arrival of the first widebody aircraft for Uganda airlines caps the difficult, if ultimately gratuitous journey along the road to the revival of the national carrier. When talk of reviving the national carrier began to gather momentum during the latter part of 2016, memories of the unceremonious departure of Uganda Airlines from the African skies in 2001 always cast a dark shadow.
Yet the nostalgia for the ‘Flying Crane’ remained strong especially every time Ugandans saw flag carriers of neighbouring countries, on the tarmac at Entebbe.
Three years earlier, the transport and works ministry had already come up with a Concept Paper. It was later passed on to Cabinet for discussion, eventually ending up as a Cabinet Paper destined for parliamentary debate and supporting a second attempt at operating a national airline. Soon the proposal became part and parcel of the National Development Plan II (2015/16—2019/20).
In the meantime, pessimists pointed at the high costs involved bearing in mind Uganda was a relatively poor country. Much was made of the fact that when it was finally shut down the heavily indebted former airline (launched in 1977 by Idi Amin), was being directly subsidized by the government on a weekly basis. At that stage, it was no longer a going concern and as one commentator put it at the time, “ just running on borrowed time”.
According to Eng. Dickinson Dunstan Turinawe, a former worker with the defunct airline, “The eventual collapse of Uganda Airlines was attributed to under capitalisation, asset stripping, a faulty privatisation process and uncompetitive fuel prices.”
However, the optimists said lessons had been learned, especially the need to hire professionals who would run the venture on purely commercial lines with no political interference.
In between were other lengthy arguments both for and against that eventually helped define what was really at stake—Uganda’s future competitiveness in international trade and tourism. Could this be fully realized when the country depended on foreign carriers?
Following a directive from the Presidential Economic Council (PEC), the National Planning Authority (NPA) was asked to prepare a document on the Revival of Uganda’s National Carrier. Taking lead on the assignment, the NPA also invited input from various stakeholders including the Ministry of Works and Transport, Uganda Civil Aviation Authority (UCCA), Ministry of Finance, Planning and Economic Development, Uganda Development Corporation (UDC), Uganda Air Cargo, Ministry of Defense and State House. The feasibility study also relied on preliminary studies done by the UCCA (carried out by Ernst & Young) and the UDC. The NPA came out with a comprehensive document that delved into every aspect of reviving Uganda Airlines, including the past mistakes and how to avoid repeating them.
Ultimately, the NPA panel wrote: ‘The study recommends that the investment in the National Carrier should be considered as an infrastructure for enhancing the country’s global connectivity and competitiveness, beyond the direct financial benefits. The carrier will play a catalytic role in tourism development and promotion, export growth, investment in various priority sectors and global networking’.
The study took into consideration the lessons learnt from the previous National Carrier and other international best practices. Furthermore, Uganda loses about US$540 million annually, in form of higher transport costs (extra charges) to passengers originating and terminating at Entebbe International Airport, due to absence of a National Carrier.
After wide consultations the NPA suggested use of the Bombardier CRJ 900 and the Airbus A330-200 series for regional and international operations, respectively. Secondly, ground-handling services were recommended as a central component of the carrier’s operations.
The panel also recommended that an internationally recognized management team, with clear performance targets, appointed for a period of three years, for the successful launch and sustainability of the National Carrier and ultimately listing on the stock exchange.
In a nutshell the NPA view was that the investment in the National Carrier should be considered as an infrastructure for enhancing the country’s global connectivity and competitiveness, beyond the direct financial benefits.
Commenting after publication of the feasibility study, NPA Chairman, Prof. Kisamba Mugerwa said, “We are advocating for re-instatement of Uganda Airlines in order to develope Entebbe into an aviation hub in the region.”
There was momentum especially after President Yoweri Museveni publicly endorsed the idea at the beginning of 2017. Skeptics still wondered how competitive the revived airline would be, faced with the more established carriers that dominated Uganda’s market for regional and international travel. How much money was the government willing to throw at the venture during the formative years?
In his farewell remarks as NPA chair, Prof. Mugerwa recalled, “When I convinced my boss, the President, on the need to revive the Airline, some colleagues said otusse (you have killed us).”
But a notable factor mentioned in the study that influenced the President’s thinking was that Uganda had a big service gap in this critical sector of the economy which foreign carriers were taking advantage of. According to the NPA, this encouraged the dominance by foreign carriers ‘who were using predatory pricing on the Ugandan market, to the detriment of citizens and the economy’.
Hosting a Sudanese business delegation at State House sometime in November 2017 Museveni said, “I am convinced that Uganda Airlines will succeed mainly because of six factors: Ugandans in the Diaspora, the Indian community, businesspeople, tourists, regional traffic and internal travel. There are many industries developing in the country that will use the airline to export their products.”
The President went on to say, “Uganda has a captive travelling population. Many Ugandans want to use a flying schedule that suits them and yet most of the airlines look at nationalism and must first pass through their countries of origin. In terms of tourism, no country can compete with Uganda if we have an airline and promote our nice weather, wildlife and the other tourist attractions”
Seven months later, Museveni told Parliament the government had already booked slots for the manufacture of medium and long distance planes.
By the end of January 2018, the Uganda National Airlines Company was incorporated. Meanwhile the government was making cash down payments for the first two new Bombardier CRJ 900s (US$27.3 million each) with a view of clearing all financial obligations by the time all the four aircraft landed at Entebbe International Airport the following year.
A few months later at the annual Farnborough Air show in the UK, it was announced that orders had been placed for a pair of Airbus 330-880neos.
Uganda Airlines CEO, Eng. Bagyenda said, “This agreement demonstrates our ambition for economic growth supported by a robust aviation industry. The A330-800neo combines low operating costs, long range flying capability and high levels of comfort.”
There was quite a stir when the first two Bombardiers touched down at Entebbe International Airport on April 23, 2019. President Museveni and First Lady, Janet Museveni were on hand to receive the planes, as was a host of other dignitaries. Emotions ran high at the colourful event. The ‘Flying Crane’ was back in the skies.