ANB-BIA SUPPLEMENT

ISSUE/EDITION Nr 371 - 01/07/1999

CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS



Uganda

Uganda's airline industry


by Peter Bahemuka, Uganda, April 1999

THEME = TRANSPORT

INTRODUCTION

Commercial aircraft movements at Uganda's airports
have grown since the mid-nineties, influenced by several factors,
especially political stability, macro-economic policies pursued by the government
and the Civil Aviation Authority's marketing strategies.
There has been increased passenger flow from 100,000 in 1991
to the present level of 400,000 passengers per year

Air traffic trends at Uganda's airport grew at a rate of 13.2% over the period January-October 1996 as compared to an average of 24.7% per annum recorded during the period 1991-1995, reports the Civil Aviation Authority (CAA). The CAA said that aircraft movement traffic grew to 12,600 movements in 1995, up from a base of 5,615 aircraft movements at the birth of the CAA in 1991.

Airline operators

The growth is attributed to the increase in the number of scheduled and non-scheduled airline operators. Scheduled international carriers operating at Entebbe International Airport increased from nine in 1991 to fifteen in 1998, whilst many of the existing ones increased their frequency. Scheduled aircraft movements grew at an average of 22.7% per annum from 2,430 in 1991, to 5,480 in 1995.

The new entrants include, amongst others, British Airways (which returned to Uganda in 1991), Gulf Air, Air France, Alliance Airlines and Iran Air. The traditional scheduled operators include the national carrier, Uganda Airlines, Kenya Airways (which flies 13 times from Entebbe to Nairobi every week and collaborates with KLM, flying out of Nairobi to Europe 21 times a week), Air Tanzania, Ethiopian Airlines, Egypt Air, Sabena and Aeroflot.

Uganda Airlines, which has lost most of its routes to Alliance Airlines, flies to Nairobi 13 times a week, twice a week to Johannesburg (South Africa) and Dubai (United Arab emirates), five times a week to Kigali (Rwanda) and once a week to Harare (Zimbabwe) and Lusaka (Zambia). The airline is planning to increase the frequency to Johannesburg to three.

British Airways (BA) local manager, Jan Petrie, says that by flying one of the improved Boeing 747 aircrafts on the Entebbe-London (Gatwick) route this year, BA will increase passenger capacity on the route by 37%.

Passenger traffic

The CAA reported that international enplaned/deplaned passengers grew by 18% during the period January-October 1996 as compared to the same period in 1995. This category of passengers more than doubled from 118,527 passengers in 1991 to 254,335 passengers in 1995. Over the period 1991-95, the annual growth rate was 21.4% annum.

During 1992, the Uganda government relaxed visa restrictions for Americans, Canadians, European Union citizens and Australians, among others, and revised customs and immigrations procedures to ease the flow of traffic through the airports. This was meant to enhance the recovery of the tourism industry in Uganda and has contributed partly to the increased flow of passengers coming to Uganda. However, in an unprecedented development, the visa restrictions for the above countries were this year re- introduced and now citizens of these countries need visas to visit Uganda. The domestic passenger traffic, comprising tourists and non-governmental organisation workers, grew at an average rate of 31.3% per annum for the period 1991-95. In addition to Entebbe, other airports such as Arua, Gulu, Kasese, Kidepo and Pakuba have been opened to direct access by air traffic outside Uganda.

About 50% of the passenger traffic at Entebbe International Airport was destined for regional airports of Central And Eastern Africa in 1995 and 1996. The Middle East sector has recorded consistent passenger growth rates over the years, while South Africa and the Far East are growing into significant passenger destinations from Entebbe.

The CAA says cargo traffic at Entebbe significantly grew by over 30.1% in 1996. The Middle East and Far East lost their share of air cargo to water transport because of the prohibitive Cost Insurance On Flight (CIF) value used by the Uganda Revenue Authority in computing taxes.

The CAA reported that exports through Entebbe increased six- fold, at an average rate of 58.8% per annum from a base of 1,367 tonnes in 1991 to 8,434 tonnes in 1995. The rapid growth in exports is attributed to fish and flower exports which grew by 86.8% and 83% in 1996 respectively. Rebecca Kadaga, formerly minister of State for Transport and Communication, said that Entebbe is fast growing as a cargo hub in the Great Lakes region which gives Ugandans an opportunity to export fresh horticultural products, fish and beef among others.

However, the growth rate of imports through Entebbe airport declined steadily over the period 1991-1995 due to the prohibitive CIF-based taxation for goods imported by air. For example, the growth rates for imports in 1995 and 1996 were a paltry 8.8% and 4.5% respectively.

The CAA

The CAA was formed in 1991 to streamline and reorganise the then fragmented air transport industry and has since then been engaged in developing a safe, secure and regular and efficient air transport industry. The CAA also oversaw Phase One involving the rehabilitation and refurbishment of the Entebbe International Airport passenger terminal building under a loan from Spain.

The CAA also oversaw Phase Two of the rehabilitation of the airport involving the resurfacing of the runways, the runway lighting, apron and modernisation of navigation aids under a US$28 million grand from Denmark. A Cargo Cold Storage facility and its accessories at Entebbe were also completed under the CAA. The National and Airport Facilitation and Security Committees have been reactivated to handle security and facilitation of aircraft, passengers and cargo through Uganda air space and airports.

Last December, the CAA also commissioned a new US$45,000 passenger terminal building at Mbarara airfield in western Uganda, one of the 12 facilities managed by the CAA, in an ongoing drive to develop the air industry in Uganda. This airfield can be used to access Queen Elizabeth and Bwindi Forest (famous for mountain gorillas) national parks and Imara Magambo Forest, which are tourist attractions.

The CAA liberalised ground handling, restaurant, duty free shops, taxi operations and airport cleaning. "We have made Entebbe Airport provide business opportunities for both local and foreign investors who would like to do business at the airport", says Ambrose Akandonda, CAA's managing director. The ground-handling rights, previously held by Uganda Airlines, were granted to Entebbe Handling Services by the CAA. Akandonda also said the CAA has proposed to the government to develop a duty free zone. The CAA has well trained airworthiness surveyors who carry out a stringent process of monitoring the mechanical status and airworthiness of aircraft operating at Entebbe.

In spite of hiccups along the way, the future looks bright for Uganda's air transport industry.

END

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