Founded in 1977, Uganda Airlines was the national carrier started by the late President Idi Amin. It commenced commercial operations in 1988 but was soon riddled by management and financial problems that by the late 1990’s, the NRM government began negotiating with private entities with a plan to privatise the Uganda Airlines Corporation.
But with every potential buyer pulling out last minute, the Airline collapsed in May 2001 and hasn’t been able to hit the skies again. However, in 2013, the government unveiled plans to revive the national carrier in order to cash in on the revenue from the growing number of visitors to the country but also boost the national brand as a tourism destination.
Last week, during the budget reading, Finance Minister Matia Kasaija revealed that the government had earmarked a whopping Shs4.8 trillion to the Works and Transport sector part of which is to procure four Bombardier aeroplanes to do internal and external flights. These are expected to be in the country in December this year.
Kasaija noted that the revival of the National Airline will enhance Uganda’s competitiveness by reducing the cost of air transport and ease connectivity to and from Uganda. It will also support faster harnessing of opportunities in tourism, agriculture and minerals, oil and gas.
Now that the airline’s revival is no longer a matter of speculation, the real question to ask is how long will it last in the air? To understand this, we need to examine how it collapsed in the first place. 65-year-old David Basobokwe was there and saw it all. When Matooke Republic asked him why the national airline collapsed, corruption, intrigue and utter lack of patriotism made the top of his list.
“Everybody was taking whatever was available. When Obote returned he came with his own people just as Museveni did and they broke down the airline. Museveni came and finished it off,” the former Uganda Airlines staff said.
Has the government dealt with the management issues, corruption and intrigue that failed the carrier in the fast place?
Jim Mugunga, the Finance Ministry spokesperson is equally unconvinced that the sharks that swallowed the precursor will not swallow the sequel but is willing to leave it to chance.
“The reality is that post-2016 airline management has to be professional, experienced and competent. The Government appointments and interference, failed ideology, backward thinking and corruption have no place here,” he said.
Mugunga also cautioned the government on the profitability of the national carrier especially in the face of competition from international giants such as Emirates. Giant, multi-national and private airline companies, he said, have squeezed the traditional, “national airlines” out of business.
Three years ago, Kenya Airways (KQ) reported a net loss of $258m, the country’s worst ever corporate loss. This amount, equivalent to Ush870bn, dwarfs the Shs32bn given to the tourism sector this financial year.
In South Africa, the story is not very different. In 2015, South African Airways (SAA) declared that it was technically insolvent. To date, it survives on state-guaranteed loans yet remains incapable of producing financial statements.
While the proponents of the airline argue that we need a national airline to create jobs, transport people, fly unpopular routes, develop tourism and trade and carry the national flag, veteran business journalist, Paul Busharizi thinks that Uganda has better ways to employ her people and make more money than an airline.
“Starting up Uganda Airlines at any cost; in the old form and business model, in order to fly the national flag, or for pride and sovereignty is simply bizarre. KQ and SAA serve as a lesson to Uganda that no airline, national or otherwise, established under old-school sentimental “national” carrier policies, can survive in today’s hugely competitive environment,” he said.
Uganda Airlines might fly again but only time will tell how long it stays in the great blue skies.