Uganda raises its standard

As the host, Uganda Airlines naturally went all out to impress at the African Airlines Association (AFRAA) Annual General Meeting, especially as the 2023 edition was the first time in over five decades that the association’s member carriers had rendezvoused for this meeting in this landlocked country in East Africa.

“It gives me great pleasure to see all of you come to Uganda, most of you for the first time,” said Bamuturaki, in her role as President of AFRAA. “We are fortunate to be hosting [the AGA] as a young airline.”

Uganda Airlines is not a new name, but it is a new incarnation of the country’s flag carrier. The original state-owned airline operated from 1977 to 2001 but folded that year after attempts to privatise the ailing carrier did not materialise.

Government efforts to relaunch Uganda Airlines came to fruition on 28 August 2019 with its first commercial flight from home base Entebbe to Nairobi, Kenya.

Soon after its resurrection the airline had an enforced six-month operational hiatus because of Covid in 2020 but resumed its fledgling regional network in October of that year with a fleet of four 76-seat Bombardier CRJ900s and two 258-seat Airbus A330-800s.

Management upheaval

The airline was flying but there were issues on the leadership front, and local media reported in May 2021 that most of the top executives of the carrier were suspended amid allegations of corruption and mismanagement.

Jenifer Bamuturaki, who had a short stint as commercial director of the carrier from April to October 2019 setting up its sales operation, returned as acting CEO in May 2021. She was promoted to full CEO in July 2022.

Bamuturaki has had a lengthy career in Uganda’s travel and hospitality industry, spending 8 years as the head of sales and marketing at Air Uganda from 2006 to 2014, and later running the sales operations at two leading Kampala hotels.

The past year has been “very hectic” implementing the growth strategy of Uganda Airlines and preparing for the AFRAA event, said Bamuturaki.

Running any airline is a demanding job, no more so than in Africa where corruption and stakeholder interference are sadly commonplace and media reporting can only be sensational and negative.

One of the things Bamuturaki wanted to do, in partnership with AFRAA, was find a better connection with reporters and enable them to report “from a point of knowledge.”

An out-of-town retreat for three days was organised for local journalists. “We took 22 of them in the run up to the AGA and we went through aviation like we were teaching interns. It has changed the way they report. They ask more informed questions.

“One thing we also noticed [since then] is that when they when they present a story, they no longer do the sensational headlines. They do the factual headlines,” said Bamuturaki. The sessions included an explanation of airline profits and losses to help journalists understand the cost drivers for an airline.

“We also wanted them to understand that the way you report determines how Uganda Airlines is looked at by fellow airlines,” she explained. “I mean, will they partner with you if they think you are closing tomorrow?”

Performance

The carrier’s financial results show it has made a loss in the past three years, and Bamuturaki told Uganda reporters in early December that the airline needs five to seven more years to reach breakeven.

The cost of launching new routes as the carrier establishes a market presence is a major factor in a gradual move into the black.

Bamuturaki prefers to take about growth in percentage terms as opposed to revealing passenger numbers, and confirms this growth means Uganda Airlines is “making money” even though this is not translating into net profitability quite yet.

In terms of passenger numbers, it grew 75% in its fiscal year ending June 2023 compared to the previous year.

“However, it means that we are growing and penetrating different markets and being known,” she said. “It has been hectic because this fiscal year is when we have seen numbers grow. People want to fly. There are no more virtual meetings. Tourism is back.”

Uganda Airlines is seeing healthy traffic flows on its regional African network, and its presence on routes like Dubai is enabling it to win passengers, as its competitors Emirates and Air Arabia [which serves Sharjah in the United Arab Emirates] are finding, noted Bamuturaki.

The carrier’s route expansion is another reason for a busy 2023, which will continue in 2024.

“In our business implementation plan, the airline should have launched close to 18 routes now. We now have a strategic plan and the new routes being launched are part of this plan,” she explained.

There is no doubt new route rights have taken longer to secure than expected. Understanding the different regulatory regimes in the markets where it seeks to operate to is time-consuming and complex.

“Because we are a young, new airline getting into these markets was so difficult,” said Bamuturaki. “For us, that scrutiny is because we are a start-up where everyone is wondering, what are they up to?”

The carrier has been receiving staunch support from the country’s CAA as well as the government to secure new route rights, noted Bamuturaki.

“We have been working on the launch of flights to Mumbai and Lagos for close to two years,” she said. “We have been working on London for three years now. Guangzhou the same. It takes longer now to go over the hurdles of regulatory requirements.”

The carrier’s efforts came to fruition on 19 October with the inauguration of A330 flights to Lagos, while the Mumbai service, also featuring the A330, began on 7 October. These were the 12^th and 13^th routes for Uganda Airlines. The hope is that services to the UK and China will follow soon as it aims for its 18 routes.

Fleet mix

The main issue with the Uganda Airlines fleet mix is obvious: it has no 150-seat size single-aisle in between the CRJ900s regional jets and the widebody A330s. “Some of the routes we are operating with the CRJ should be a mid-range [narrowbody], while some of the routes we operate with the A330 should be with a smaller aircraft,” said Bamuturaki.

The carrier is addressing this and intends to introduce around ten mid-range and long-range, two-class narrowbodies in the coming decade, she said.

“The conversation has started with government. This 10-year fleet plan is moving to a level where we are going to confirm it with government to make sure that it's cast in stone so that every time a plan is being made nationally this is put into consideration,” said Bamuturaki.

Additionally, the government is open to the carrier leasing aircraft, said Bamuturaki. Its current fleet is 100% owned but with aircraft orderbooks so packed the option of leasing is important to gain access to earlier delivery slots.

“We are already talking to lessors,” said Bamuturaki. The plan is to make aircraft commitments by the end of its fiscal year in June 2024 with both Airbus and Boeing models under evaluation.

The fleet plan also sees the widebody fleet doubling to four aircraft, she added.

From launching new routes and building up the fleet, Uganda Airlines can also look forward to a revamped home airport at Entebbe International Airport. Delegates to the AFRAA AGA saw at first hand the progress on the expanded terminal.

Bamuturaki has her plate full to ensure the next five years of Uganda Airlines is a success story. The ingredients to achieve this are apparent. The African Development Bank estimates the country’s GDP growth is projected to be 6.7% in 2024.

And crucially, the state-owned carrier has a government that is working to give Uganda Airlines the opportunities it must take to ensure this version of the airline stays the course.