A fierce battle is looming in the East African aviation market as Uganda’s national carrier, Uganda Airlines, takes to the skies on August. 28.
The Ugandan national carrier is expected to heighten competition against the Kenya Airways, RwandAir, South African Airways and Ethiopian Airlines that have dominated the region for decades.
Uganda Airlines Commercial Director, Jenifer Bamuturaki, said on August. 02 that the carrier has obtained a certificate from the International Air Transport Association (IATA) and that the flight tickets are on sale ahead of the scheduled maiden flight to Jomo Kenyatta International Airport in Nairobi.
Customers have options to make payments across the region through cash, credit cards or mobile money.
Bamuturaki said the carrier plans to fly to various destinations in phases in the region, with the first phase covering Nairobi, Kilimanjaro, Juba, Bujumbura, Dar es Salaam, Mogadishu, and Mombasa.
The second phase will cover Lusaka, Johannesburg, Congo Brazzaville, Bangui, Khartoum, Kinshasa, Libreville, as well as Guangzhou, India, and London upon receiving additional aircrafts.
The carrier bought four Bombardier CRJ 900s for regional flights, two of which arrived in the country on April 24. The other two are expected next month.
However, two Airbus A330-800neos, which will be used for long haul flights are expected to be in the country between 2020 and 2021.
Uganda Airlines will operate two daily flights out of Entebbe to Nairobi and Juba at a two-month promotional fare of US$278 and US$225 for a return ticket and US$257 and US$201, respectively, for a one-way ticket.
It will fly three times weekly to Mogadishu at US$590 for a return ticket and US$448 for a one-way ticket.
Bujumbura and Mombasa will be serviced three times a week at US$292 and US$325 for a return ticket, respectively.
Dar es Salaam and Kilimanjaro, which will be serviced daily, have been put at US$286 and US$311 for a return journey and US$289 and US$290 for one – way journey, respectively. The carrier will also offer aircraft charter, holidays and safaris as well as cargo freight services.
Normal rates, however, usually range between US$300-US$400 for various destinations in the region.
This development comes as the revived Air Tanzania makes efforts to capture a share of the regional aviation business and the continent.
With a fleet of six aircrafts and two more expected before the end of the year including a Dreamliner, the Tanzanian national carrier, unveiled the Dar es Salaam-Mumbai route last month and secured a slot at the London-based Gatwick Airport.
This follows the launch of Dar es salaam-Johannesburg route in June this year. The carrier is also flying to Comoros, Entebbe, Lusaka, Harare and Bujumbura.
The older airlines, however, have had to come up with various offers to remain competitive in not only the regional aviation market but also the African market.
Kenya Airways which has had near monopoly on these routes amid complaints over exorbitant charges is as well, looking to strengthen its intercontinental, long-haul flights to the United States, Europe, Asia and West Africa.
Kenya Airways operates at least four daily flights from Nairobi to Dar es Salaam, five daily flights to Entebbe in Uganda, four daily flights to Lusaka in Zambia and at least one daily flight to the tourist town of Livingstone in Zambia also two other cities in Zambia.
In June in this year, the Kenyan carrier announced plans to double its fleet over the next five years to widen its route network.
The carrier had a fleet of 41 airplanes at the end of last year, comprising a mix of wide and narrow body Boeing planes, compared with Ethiopian which operates more than 100 planes.
In February last year, Kenya Airways low cost subsidiary, Jambo jet unveiled two-daily flights out of Entebbe. The carrier was in May 2016 granted regulatory approval to fly to 16 routes including Addis Ababa, Dar es Salaam, Zanzibar, Kilimanjaro, Mwanza, Kigali, Juba, Bujumbura, Hargeisa, Mogadishu, Goma, Kisangani and Moroni.
On the other hand, Ethiopian Airlines is seeking to set up hubs in southern, central and the Horn of Africa. The Addis Ababa based airline has been reviving some of the stalled national carriers, mainly in the southern Africa region where it operates a substantial number of flights.
Ethiopian Airlines has signed a shareholding agreement with Zambia’s main development agency to re-launch the southern African country’s flag carrier at an initial cost of US$30 million, a step that will see the Horn of Africa leading airline acquire 45% stake in Zambia Airways, which is set to be re-launched after more than two decades on the ground.
Under the new pact signed last year, the Zambian government will be the majority shareholder with a 55% stake, with Ethiopian Airlines taking the rest 45% stake. The Airline is also seeking to set up hubs in Southern, Central and the Horn of Africa.
Ethiopian Airlines helped launch ASKY Airlines in the West African country of Togo and then acquired a 49% stake in Malawi’s flag carrier in southern Africa in 2013.
Ethiopian carrier is also said to be in talks with Chad, Djibouti, Congo Republic, Democratic Republic of Congo, Equatorial Guinea and Guinea to set up carriers through joint ventures or secure landing spots. It also aimed to create a new airline in Mozambique that it will fully own.
In East Africa, Ethiopian Airlines flies to Nairobi, Entebbe, Kigali and Tanzania tightening competition on Kenya Airways, RwandAir, and Air Tanzania.
In addition, Ethiopian Airlines has direct flights between Juba and Entebbe – the route that has existed since 2014 following the demise of Air Uganda.
This development in the region’s aviation industry means that Uganda Airlines has to put up a serious fight based on the quality of services such as timely departure so as to capture a good share of the aviation business.
We are ready for competition
Cornwell Muleya, the technical advisor at the Uganda Airlines said the carrier is ready to compete with the established airlines in the region.
He, however, said if the carrier is to succeed, then, it must make the right decision, right investment, right funding as well as ensure that there are right people to run the airline.
“If we do all those things which make an attractive airline, then it doesn’t matter what the competition does because automatically customers will want to go with the one who offers the best service,” he said.
Uganda Airlines is pinning its growth on the local population that is estimated to be spending slightly over US$400million on flights annually.
Currently, Entebbe International Airport handles more than 1.8million customers, shared among more than 18 airlines.
Ephraim Bagyenda, the CEO at the Uganda Airlines, said though the carrier may not necessarily make huge sums of money, it will help in the growth of other sectors of the economy.
“The airline will promote agriculture export to support the economy, market the country for tourism, and provide employment to many Ugandans,” he said.
Uganda’s export that consists mainly of agricultural products has been growing over the last five years from merely US$2.7bn in 2014 to US$3.6bn in 2018.
Similarly, tourism has continued to register growth in earnings from US$1.1bn in 2013 to US$1.4bn in 2018.
Financial analysts said it would be prudent for the Uganda Airlines to share their strategy on whether they would be targeting the low-cost customers or premium customers.
“Despite of the many flights on the Entebbe-Nairobi route, prices of the tickets are still quite expensive,” said Aeko Ongodia, CEO of Xeno technologies. “Flying from London to Barcelona is possibly 45 euros yet the distance is much longer.”
Ongodia said carriers intending to compete on premium rates such as those offered by Kenya Airways and RwandAir will need to do a thorough analysis on whether the specified routes have enough business class to occupy the business section.
However, he said there is still room for the growth of the low cost carriers in the region due to limited number of competitors. Currently, it is only Jambo Jet that operates a low-cost carrier.