Uganda Airlines full-year target in sight as H1 revenues hit USD13 million

January 22, 2022 in Business, Companies, Transport, Travel & Tourism by Editor

Flag carrier Uganda Airlines is on track to achieve its full-year target for the first time in two years, after carrying ninety-eight thousand passengers during the six months to December 2021 and grossing USD 13m million revenues over the same period.

The numbers revealed this week during the carrier’s first media briefing for 2022, represent 64pc of the USD20 million target revenue for fiscal 2021/22 and are more than half the total number of passengers carried between August 2019 when commercial services commenced and December 2021. The bulk of passengers (84,397), were generated by the airline’s fleet of four Mitshubishi CRJ-900 aircraft, while the pair of Airbus A330 aircraft which primarily operate on the Entebbe Dubai route accounted for 14,363 passengers.

According to interim chief executive Ms Jenifer Bamuturaki, cumulatively, the airline carried 165,792, between August 2019 when commercial operations started and December 2021.

Bujumbura, Juba and Mogadishu were the best performing routes between June and December 2021 with an average load factor of 70pc.

“We have seen remarkable growth on these three routes,” Bamuturaki said adding that the results set the stage for 2022.

The Dubai route picked up very fast with the cabin factor averaging 89pc although revenues were depressed by the promotional fairs which have been extended until March to cater for service disruptions. Despite suspensions on the route on two occasions during the past three months, flights continued to operate at 50pc of capacity because the airline had to carry returning passengers who had travelled before the interruptions. Cargo saw a boost over the period with 230 tons, mostly perishables and minerals, carried on the out bound leg while 400tons of merchandise were flown in from Dubai.

Subject to securing regulatory approvals, services to London are slated for March 2022. All required documentation was submitted last December, “and the ball is now really in the UK regulator’s court,” Bamuturaki said.

A team from the UK has been to Uganda to assess the level of carrier’s preparedness for services into the UK and compliance with regulatory requirements there. Services to the UK had initially been scheduled for December 2020 and the airline had sought approvals from European regulator EASA. But Britain’s exit from the EU, delays in taking delivery of the A330 fleet and the onset of Covid-19 and associated restrictions combined to push back the plans. Fresh designation had to be applied for from the UK, which meant a fresh start to the process.

Flights to China and India have also been put hold because of Covid-19 restrictions to air travel to those markets but work continues in the background to complete regulatory endorsements.

The airline is exploring new routes in Africa during this year with talks on additional services to the DRC cities of Goma, Kisangani and Lubumbashi in progress. Market evaluation is also ongoing for possible services to Lagos and Saudi Arabia, it was revealed.

Fleet Development

Although much of the planned new routes can be accommodated within the existing fleet, the airline is advancing plans to buy medium capacity narrowbody aircraft because of weight limitations on some routes using the CRJ-900. The carrier has often had to make a tradeoff between passengers and baggage on routes such as Johannesburg because of the CRJ’s limitations.

“Much of the planned expansion can be accommodated within present fleet because by the end of the second year according to our business plan, we were supposed to fly 18 routes regionally and 4 routes internationally. We are currently flying 10 routes regionally and one international route, so we still have adequate flexibility within the fleet,” Bamuturaki said. The

Management is waiting for shareholder approval before issuing a request for proposals but Ephraim Bagenda, the director for maintenance says, fleet commonality to keep maintenance costs down will be a major consideration.  That essentially leaves Airbus alone in the field with its A220 and A320 propositions although Boeing and Embraer are understood to be making pitches. He gave no indication of numbers but the business plan says two such aircraft would be required initially.

Self-handling is slated to start in April with third-party handling expected to follow. The carrier is also seeking approval to spend USD2.5 million to set up its own maintenance organization, to save on the USD3million combined cost it is spending annually on contracted maintenance. The proposed capital outlay will cover training, building hangar space, tooling and stocking up on a essential spares and consumables. Maintenance, outsourced to SAMCO Aircraft Maintenance Netherlands for the CRJ fleet and South Airways African Technical for the A330, is costing the airline a combined outlay of USD250,000 per month, maintenance director Emphrain Bagenda revealed.

“We have the internal capability to carry out our own maintenance because there are many Ugandan engineers and technicians qualified on the aircraft types’ we operate that want to return home and also many qualified people in the region to carry out the tasks,” Bamuturaki said adding that it was also a necessary step for opening of opportunities for the many young people graduating from the East African Aviation Academy in Soroti, eastern Uganda.

Air Tanzania preps UR for safety audit

The airline has also started on audits for the IATA Operational Safety Audit (IOSA) with certification expected in October. The carrier is working with Air Tanzania with which it has entered commercial cooperation, to go through the drills of audit.

“IOSA certification will open up the scope for cooperation with other airlines because it will resolve most of the questions around safety,” Bamuturaki says.

In the interim, some airlines such as Emirates and Qatar that are keen on the benefits of commercial cooperation have waived IOSA certification in the interim and working on integrating their sales and reservations systems with Uganda Airlines. The airlines expect to make joint announcements with the two Gulf carriers about cooperation in the coming weeks.