Uganda Airlines wants to capitalise on the future development of the Ugandan oil industry
As of 1 April 2022, Uganda Airlines has a new board of directors, chaired by Priscilla Mirembe Seruka. The new team wants to turn the page on the financial malpractices and management problems that have tainted the reputation of Uganda's national airline since its launch three years ago.
Uganda Airlines wants to take advantage of the future development of the oil industry in Uganda. "In order to enable the airline to serve the oil industry, we will undertake a feasibility study that will inform our domestic operations strategy, primarily to boost connectivity around tourism and cargo," says Priscilla Mirembe Seruka, its new board chairperson, in an op-ed published by Monitor, a Ugandan newspaper, on 25 July 2022.
The project comes after the Ugandan government signed an investment agreement with China National Offshore Oil Corporation (CNOOC) and France's TotalEnergies to develop the country's oil and gas industry. To this end, more than USD 10 billion will be invested to build several oil facilities, including a 1,400 km pipeline to bring crude oil from landlocked Uganda to the port of Tanga in Tanzania.
UGD also plans to provide all ground handling services for its flights itself. "A project that will save 40% of the operational costs of its hub in Entebbe," says the PCA. The carrier also wants to develop its cargo business. "There is great optimism in the development of our cargo business, as we believe in the prospects of developing supply chains. Cargo will transform agribusiness, which accounts for 60% of Uganda's exports," she believes.
In order to achieve all these projects, the company is aiming to acquire a cargo plane and a mid-range aircraft "to fill the gap between the CRJ and the Airbus".
Currently, its fleet, with an average age of 2.7 years, consists of four Bombardier CRJ900s and two Airbus A330-800s. It is under-utilised, even though the state-owned network comprises only 11 destinations. Since its inception, and the launch of operations on 28 August 2019, Uganda Airlines has already sunk 1600 billion Ugandan shillings ( $413 million).
"The funds have been invested in aircraft acquisition, engineering spares, ground support equipment and fleet maintenance contracts," Ms Seruka justifies.
After three years of operation, and all this investment, Uganda Airlines is still operating at a loss. "To become profitable, we will need strategic partnerships with other airlines, mainly those who are members of IATA," she said. In the meantime, she announced the imminent unveiling of her five-year business plan.
