Ethiopian Airlines has backed plans for Uganda to reestablish a national airline, saying it will not only benefit Uganda, but other players in the industry through growing tourism, agriculture and international trade.
“It would be a good thing for Uganda to have a national carrier as this would boost its economy. This can be established by partnering with a big established player, like Kenya Airways did,” Abebe Angessa, the Ethiopian Airlines area manager, said at a media briefing in Kampala.
Uganda Airlines, the national carrier, closed in May 2001 after 25 years of operations due to bankruptcy and mismanagement. The closure followed Parliament’s opposition to take over bids from South African Airways, Kenya Airways, Air Mauritius and British Airways.
Calls for the resumption of a national airline have been on. The Minister of State for Transport, Stephen Chebrot, backed by exporters, traders, the tourism industry, have been calling for the re-establishment of the airline.
Abebe, however, pointed out that the imminent exit of British Airways may not be a game changer, since Uganda is already served by more than 15 large airlines. He noted that the recent exit of airlines, including Air Uganda, were merely strategic, and not irreversible.
But Abebe said reestablishing a national carrier for Uganda would boost trade, especially for perishable goods and also boost tourism and generally grow the economy.
With heightened economic activity, there would be more travellers into
which the other players in the industry would tap.
“The airline industry follows the economic growth patterns. Africa’s growth is promising and, therefore, the prospects of the industry look bright, although industry margins are low and costs are high,” Abebe explained.
He noted that the Ethiopian Airlines experienced a 27.4% increase in outbound passengers from Entebbe Airport to 79,000 in the 2014/15 financial year, from 62,000 the year before.
Now, Ethiopian Airlines has a 49% stake in Malawian Airlines, which was established in 2013, a year after it collapsed. Similarly, the government of Kenya owns a 29.8% stake in Kenya Airlines, with Dutch
Airline KLM, holding a 26.73% stake and the rest of the shares owned by the public.
Amos Wekesa, the chief executive officer of the Great Lakes Safaris, said Uganda should follow a similar pattern, but ensure that Ugandans own the larger part of the airline.
“This country cannot develop without local ownership and participation in the national economy. The national airline should be looked at as national infrastructure. Kenya commands up to 30% of the European market for coffee and tea because they have a national airline,
“If Uganda were to have its own national airline, we would be more competitive in international trade,” Wekesa said.
James Kanyije, a horticulture exporter, said a national airline will boost Uganda’s exports through preferential air fares, conducive flight schedules and better terms of payment.