Optimism as Uganda Airlines expands

Experts say coming months critical for new planes, routes

Kampala, Uganda | IAN KATUSIIME | Plans by Uganda Airlines (UR) to expand its fleet to about ten aircraft and add about five new destinations are causing excitement among passengers and its operators.

Several planned UR destinations have been on hold due to shortage of aircraft according to airline sources. The destinations in the offing include Accra, Ghana; Riyadh, and Jeddah in Saudi Arabia, Cape Town in South Africa, and Guangzhou in China.

During the budget reading for FY 2025/2026, Minister of Finance Matia Kasaija, announced that Shs6.9 trillion is allocated for integrated transport and infrastructure which includes air travel.

The approved budget estimate for the just ended financial year for Uganda Airlines was Shs92billion. This sounded like good news as the government of Uganda has indicated plans for capital injections for the national carrier.

The airline plans to acquire additional aircraft like the Boeing 787 Dreamliner which can carry up to 250 passengers to meet the demand.

The 787 is renowned for its 20% better fuel efficiency compared to similar aircraft according to aviation experts. The Dreamliner, a widebody aircraft, is serving various long-haul flights of 12-14 hours such as across the Atlantic.

It has gained popularity among passengers although the recent crash of Air India that killed 241 people has added to the burgeoning safety concerns about the American plane manufacturer.

For destinations like Guangzhou, a port city known for attracting millions of people for global trade, Uganda Airlines is looking at new planes to serve the need. UR is also exploring purchasing and leasing a number of B737s to manage its network of planned routes.

Since its revival in 2019, Uganda Airlines has sparked excitement in the country. The launch at its hub, Entebbe International Airport, was a glitzy affair with the Ugandan flag and crested crane adorning the livery. The airline was liquidated in 2001 due to chronic mismanagement.

Now in its sixth year of operation, UR flies to 17 destinations. They include Nairobi, Dar-es-Salaam, Mombasa, Dubai, Johannesburg as some of the popular ones. The airline also flies to Lagos and Abuja in Nigeria.

Uganda Airlines also has what are termed as “seasonal special operated non-scheduled flights” such as the Hajji and Umrah flights to Jeddah and Medina in Saudi Arabia to transport muslims for the religious festivals.

The Ugandan flag carrier debuted with two CRJ Bombardier aircraft and has now grown to a fleet of six; 4 of the latter and two Airbus planes; an A320 and A330-800 to serve its expanding route networks.

Acquired a year ago, The A32O is on a lease from DAT Airlines to mitigate operating costs for the infant airline. It is a 160 seater that also handles the Lagos and Kinshasa journeys. It is a wet lease agreement which also provides crew to airlines–and the lease will be renewable after six months depending on evaluation of the aircraft.

Major leap

In May, Uganda Airlines took a major leap when it launched a new route to London, U.K. a global financial centre, to boost its standing in the aviation sector. UR operates four weekly flights on the route that has been hailed as a marker for global connectivity. The new destination has raised the ambitions of the national carrier as it makes in-roads in European and Asian aviation markets.

The inaugural flight to Gatwick Airport had diplomats, government officials, airline executives, business leaders, and media personalities.

The airline reduced its Entebbe-Dubai flights from five to three to cater to the London route—a sign of how much the Ugandan carrier is betting on the famous city. Some reports suggest that the airline had much earlier secured landing slots at Heathrow Airport, the busiest in the U.K. but the scheduling announcement never came through.

After delays on the route related to regulations of the International Civil Aviation Organization, (ICAO), UR flies to London Sunday, Tuesday, Wednesday and Friday. The offering is generating enthusiasm from travellers. The Gatwick route is served by the Airbus planes as the airline aims to compete among its regional peers. RwandAir and Kenya Airways have been flying the route for years.

A Uganda Airlines roundtrip ticket to London costs anywhere between $920 and $1000 depending on when a ticket is purchased.

Alex Kakande, who flew from the U.K. back to Uganda gushed about the service. “When it came to the flight, the flight attendants were among the best I’ve ever experienced—professional and attentive. The ladies and gentlemen wore smiles like badges of honour, and their attention to detail was remarkable from the moment we boarded until we landed,” he posted on X. He said that the Indian cuisine was the only snag on the nine hour flight.

Although Johannesburg and Dubai are popular flights, the most bankable flight for the airline is the one to Mumbai, the Indian commercial nerve centre. But it is for a different reason: medical tourism. Ugandans and other nationalities connecting from Nigeria, Zambia and Zimbabwe hop onto the airline en route to Mumbai for medical care as African healthcare facilities rot away due to neglect and underfunding.

Commercial viability

But amid the frenzy, there is debate about the commercial viability of the new route and the airline in general. It is also coming ten years after British Airways closed shop in Uganda due to empty passenger manifests from Uganda to the U.K.

Airline managers have to balance variables like economics and efficiency in a punishing business environment where more airlines go into bankruptcy than one can count.

Reports say the growth of African airlines is stymied by the failure to implement the Single African Air Transport Market (SAATM), an open skies agreement whose benefits would include route frequency, shorter travel, reduced fares, and tourism growth. But it’s hindered by visa restrictions, protectionism, and bureaucracy among others.

Although Uganda Airline’s passenger numbers are still low, they are said to be picking up, more than a month after the launch.

An airline official who did not want to be named because he does not have the authority to speak to the media said there is reason to be optimistic but the “litmus test will be from October to Feb high season for travellers”.

This is the winter season in Europe and is considered a high season as multitudes of Ugandans travel to the U.K. for study, holiday and business due to the conclusion of summertime.

“Cargo side is fully booked from Entebbe for this month until mid-next month,” said the official.

He added that London has good loads for business class at the moment. Since most airlines make their earnings from selling business class and premium economy tickets, it appears the route could pick up sooner than imagined.

High costs

Air travel has high operating expenses where fuel is the biggest single line item racking up between 30-40% of costs according to analysts. Given the volatility of oil prices, airlines have to spend a lot to fuel planes. With the nine hour flight to London, Uganda’s national airline could be staring at an invoice of $5000 for jet fuel on just one journey according to estimates.

The unpredictability of oil prices compelled full service carriers like Emirates which has been in operation for forty years, to practice fuel hedging to reduce its exposure to volatile fuel costs. The hedging enables the airline to establish a capped cost in case of a sudden price hike through agreements with oil companies and financial institutions.

Industry analysts say that maintenance costs for aircraft such as inspection of mechanics and hydraulics can run into hundreds of thousands of dollars. Airlines also need to pay for insurance for planes, passenger and cargo liability with annual premiums hitting $50,000 even for a new airline like Uganda.

Airport fees such as landing and takeoff, baggage handling, gate rental, terminal access and towing—some of which are billed by the hour—all contribute to longer ledgers. The bill gets higher for airports like Gatwick, which is the second busiest in the U.K., charging anywhere from $1,000-$8,000 for each hour a plane is on the tarmac.

Related are overflight and air navigation fees which are part of a complex web of expenses that make it harder for airlines in Africa to make even minor profit margins. Wages for pilots, flight attendants, dispatchers, engineers, ground crew, are also needed to keep the airline running.

In 2023, Uganda Airlines hired Adedadyo Olawuyi, a Nigerian airline executive, as the Chief Commercial Officer to transform the airline into an agile carrier that can meet the rigorous demands of international travel while also growing revenue streams.

The ground operations manager for Ugandan Airlines at Entebbe Airport is also Nigerian. The hiring decisions have not been without controversy due to agitation that there are suitably qualified Ugandans for the jobs; especially from the Ugandan Air Force.

Sources say Uganda Airlines pays its pilots better than regional rivals like KQ and RwandAir. A good number of the pilots were poached from RwandAir as the airline commenced operations.

With the new routes and anticipated aircraft, UR is nearing cruise level in an industry where there is immense difficulty to break even let alone make profit.

“We should look at the big picture. We are opening up Uganda to the world,” says Jennifer Bamuturaki, CEO of Uganda Airlines in an interview.