Uganda relaunched its national carrier, Uganda Airlines, hoping for a slice of the East African aviation business dominated by Ethiopian Airlines.
The country is banking on its emerging oil industry and the tourism sector to generate international traffic to sustain the airline.
Air traffic in Africa is forecast to grow six percent a year, twice as quickly as mature markets over the next two decades, most African state-owned flag carriers are losing money. The notable exception is Ethiopian Airlines, which analysts say avoided the mistakes of other regional carriers and did not fall prey to political interference.
“We undertake to be a world class airline that will exceed customer expectations through high quality service,” Ugandan Airlines CEO Ephraim Bagenda said at Entebbe, the country’s lone international airport, south of the capital Kampala.
The airline will initially fly to seven regional destinations in Kenya, Tanzania, Somalia, South Sudan, and Burundi, the CEO said ahead of the inaugural flight to Nairobi.
In November, the airline will launch flights to destinations in south and central Africa, he said.
Uganda Airlines will face stiff competition not only from Ethiopian Airlines also from Rwanda and Tanzania which poured cash into flag carriers in the past few years with less success than Ethiopia. Another rival regional carrier Kenya Airways faced challenges in its efforts to expand. It became loss-making in 2014 after buying aircraft coinciding with a slump in tourist and business travel blamed on attacks by Somalia-based Islamist militants.
The airline has not recovered and was renationalised in July in what analysts said was a last-ditch effort to save it.
Uganda Airlines, founded by Idi Amin in 1976, was liquidated in 2001 during a push to privatise state firms.
Its revival will “reduce the cost of air transport and ease connectivity to and from Uganda,” Prime Minister Ruhakana Rugunda said.
Ugandans spend about $450 million annually on foreign travel and the state-owned airline would keep some of this in the national economy, Rugunda said.
Citizens would benefit from direct flights from their capital over expensive, indirect routes on rival airlines, the prime minister said.
The airline received its first two CRJ900 planes from Canadian aircraft manufacturer Bombardier in April. Two more are expected next month, according to the airline.
It expects to receive an Airbus A330 Neo in late 2020, then a second in early 2021, the CEO told Reuters in July, adding the wide body aircraft will allow the airline to expand to destinations in the Gulf and China.
Each Bombardier costs around $27 million and the carrier will pay about $110 million for each Airbus.
The airline is publicly funded and forecasts it will be self-financing after two years, the CEO told Reuters in July.