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eastafspot
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Can Uganda Airlines make profits?

Mon Apr 22, 2019 2:55 am

Uganda Airlines has received its first Bombardier CRJ900 regional jet.

https://newsaero.info/airlines/uganda-a ... ?true=1661

The airline accepted its first two aircraft on 16 April, with another two to follow shortly. The aircraft were ordered in July 2018 at the Farnborough air show. There are configured in a 76 seat, two-class configuration. Uganda Airlines is the first African operator to select the Atmosphere cabin fitting option.
Long haul ops will start when A330 will join the fleet, soon! :innocent:
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TWA772LR
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 3:09 am

Any company can make a profit of they have a good plan thats executed correctly.

That said I hope Uganda Airlines has some tax money coming it's way when they start longhaul ops. Bigger second tier African cities like EBB are tough markets to crack in many ways.
When wasn't America great?


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AF022
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 10:41 am

Simple answer is no. I can't think of any makret to/from EBB that already doesn't satisfy potential demand.
 
davidjohnson6
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 11:13 am

Does Airbus not have the ability to sometimes say 'no' to orders ? Long haul flying shortly after startup of operations is hard enough in even the richest of aviation markets, eg London or Paris to NYC. Long haul without a substantial feeder short haul network is asking for trouble, especially away from wealthy cities

Airbus should have considered partly the interests of their client instead of just taking some non--refundable deposit from some tiny airline for little/zero work in the expectation their client will go bankrupt before the aircraft is anywhere near a production line
 
MalevTU134
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 11:32 am

davidjohnson6 wrote:
Does Airbus not have the ability to sometimes say 'no' to orders ? Long haul flying shortly after startup of operations is hard enough in even the richest of aviation markets, eg London or Paris to NYC. Long haul without a substantial feeder short haul network is asking for trouble, especially away from wealthy cities

Airbus should have considered partly the interests of their client instead of just taking some non--refundable deposit from some tiny airline for little/zero work in the expectation their client will go bankrupt before the aircraft is anywhere near a production line

Eh? Why would Airbus do that? On what grounds. It would be immoral to do that because a) it is against their shareholders' best interest and b) because in this case they would be basing it on the fact that it is an African airline. Or should WOW also have been declined?
 
evanb
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 12:22 pm

Could Uganda Airlines make a profit with 4 CRJ900s flying short domestic and regional routes? I don't think it could make substantial profits, but it could be financially sustainable.

Could Uganda Airlines make a profit with 2 A330-800neo flying medium to long haul routes? Not a chance. Flying to LGW, FRA, BOM, CAN, etc will mean competing with the likes of ET, EK, TK, QR and SN and there is no way Uganda Airlines's cost structure could come anywhere close without any economies of scale. Furthermore, there isn't likely enough O&D traffic paying enough of a premium to overcome this.
 
davidjohnson6
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 12:24 pm

If there is a state owned company taking potentially reckless steps with no obvious track record in a country substantially in poverty it is incumbent on the supplier to ask themselves whether this is a viable long term business proposition for both sides.

Following the credit crunch, banks have become slightly (but only slightly) aware of the concept of mis-selling, namely taking money off customers for things that a customer really doesn't need

If not, Airbus is liable to end up with reputational risk. Sometimes the last extra little bit of revenue is perhaps best left on the table so that Airbus can show themselves to be a partner of airlines rather than just seeking to maximise shareholder benefit
 
planesarecool
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 12:49 pm

I don't think people on this website understand the purpose of airlines in developing countries, especially in Africa. They aren't necessarily out to make outright profits as an organisation, but to increase inbound tourism to the country and assist developing industries within the nation.

So no, they probably won't make a profit, but if they help develop the tourism industry in Uganda by bringing in more 'wealthy' tourists, then they are succeeding in their purpose. Same with RwandAir.
 
evanb
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 1:37 pm

planesarecool wrote:
I don't think people on this website understand the purpose of airlines in developing countries, especially in Africa. They aren't necessarily out to make outright profits as an organisation, but to increase inbound tourism to the country and assist developing industries within the nation.

So no, they probably won't make a profit, but if they help develop the tourism industry in Uganda by bringing in more 'wealthy' tourists, then they are succeeding in their purpose. Same with RwandAir.


How much is this going to promote inbound tourism versus liberalizing market access for private sector or foreign players?

Is the massive cost of acquiring a small fleet of widebodies and then ultimately funding the operational costs through subsidies really the most efficient way? Cross referencing the huge subsidies RwandAir is requiring at present.
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 3:12 pm

Better livery than Air Uganda though!



VS old one:

Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
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FCOTSTW
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 3:25 pm

TWA772LR wrote:
Any company can make a profit of they have a good plan thats executed correctly.

That said I hope Uganda Airlines has some tax money coming it's way when they start longhaul ops. Bigger second tier African cities like EBB are tough markets to crack in many ways.


I fully agree to the first statement.

Unfortunately this airline is 100% government-owned and the country in the 2018 Corruption Perception Index ranks 149th on 180 countries with a score of 26 out of 100 (0 highly corrupt, 100 very clean). Source: www.transparency.gov
 
HaulSudson
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 8:34 pm

That airline is a joke.

It will lose money from day one until it enters bankruptcy, possibly not much after day one.
 
HaulSudson
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 8:46 pm

There are no direct flights between EBB and
- the UK
- the USA
- Germany
- China
- India

Perhaps they want to change that.
 
davidjohnson6
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 9:04 pm

USA-Uganda is much too far to even think about. India-Uganda has no flights for historical reasons - if you don't know why read about Uganda's history in the 1970s

British Airways used to fly to Uganda - a bit of subsidy money might get the route to Gatwick reopened. BA's European network means they will always do better than a Uganda based airline

If Uganda wants to boost tourism generally, making things more financially attractive to the likes of Emirates, Etihad, Qatar and Turkish will go a long way and is a relatively cheap and simple way of improving ease of travel while also launching a major tourism promotion marketing campaign in a few target locations. Setting up codeshare deals with Kenya Airways or Ethiopian to boost frequency might also help connectivity

The number of permits issued each day to go watch gorillas in the wild is limited, time consuming and very expensive. Communication to the wealthier people as to why they should holiday in Uganda will likely be highly effective
 
airlinepeanuts
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Re: Can Uganda Airlines make profits?

Mon Apr 22, 2019 9:15 pm

Uganda be kidding me if you think they can make a profit.
 
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mr02
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Re: Can Uganda Airlines make profits?

Tue Apr 23, 2019 8:32 am

If there is no government interference and a competent board with aviation experience is hired,yes.
 
Mi26
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Re: Can Uganda Airlines make profits?

Tue Apr 23, 2019 9:05 am

I believe this version will perform well. The existing International routes are not serviced well, and the EBB to NBO is a huge market. There will be huge brand loyalty emerging from Uganda patrons. Also the addition of JUB to EBB will have a big effect with connecting International Flight from EBB. The Government is serious and has the cash to support this venture.
I have lived in this region for 18 years and seen lots of Groups come and go, but this venture represents the best opportunity.
 
indygs
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Re: Can Uganda Airlines make profits?

Tue Apr 23, 2019 1:08 pm

I travel to EBB with great frequency from the US, Europe and ME. As much of a fan as I am of Uganda and do believe it has great potential as a tourist destination, much of this happening is largely because there's a government that is gasping for ways to stay relevant and front of mind in the eyes of its people. What the country did to contribute to the demise of Aga Khan-backed Air Uganda was a travesty and totally showed that acting in the best interests of tourism wasn't the #1 priority. Airbus was more than happy to take an order for two planes of a model that at present has orders from two small airlines and would have been otherwise deemed a failure to start. I do hope U8 (I think that's the new Uganda Airlines code) is mighty successful--those 900's are beautiful--I just worry about the viability of the mid to long haul routes they hope to fly.
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Tue Apr 23, 2019 4:40 pm

indygs wrote:
What the country did to contribute to the demise of Aga Khan-backed Air Uganda was a travesty and totally showed that acting in the best interests of tourism wasn't the #1 priority.I do hope U8 (I think that's the new Uganda Airlines code) is mighty successful--those 900's are beautiful-

So true, it all happened so suddenly - thank God they operated on 3 aircraft meaning only few pax got stranded abroad!
The code for Uganda Airlines is QU, Air Uganda code was U7 ;)
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Tue Apr 23, 2019 4:42 pm

evanb wrote:
Could Uganda Airlines make a profit with 4 CRJ900s flying short domestic and regional routes? I don't think it could make substantial profits, but it could be financially sustainable.

Could Uganda Airlines make a profit with 2 A330-800neo flying medium to long haul routes? Not a chance. Flying to LGW, FRA, BOM, CAN, etc will mean competing with the likes of ET, EK, TK, QR and SN and there is no way Uganda Airlines's cost structure could come anywhere close without any economies of scale. Furthermore, there isn't likely enough O&D traffic paying enough of a premium to overcome this.

Any special reason you mentioned FRA?
Do you think Germany can be a good market for/from Uganda? Why KL and SN have direct flights but not LH or Condor for instance?

Also need to fly from Bujumbura to Entebbe in June - I wish they could be there already (according to a journalist at NTV Uganda - ops will start in July just before receiving A330) as:
- RwandAir has a flight only departing late afternoon at €200.
- ET, 8h trip arriving at 1am for €351
- Air Tanzania option forces to a night stop in DAR
- Only KQ left for €251 with "normal" timings.
So yes agree that they should focus on building a strong regional network first!
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
AF022
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Re: Can Uganda Airlines make profits?

Wed Apr 24, 2019 10:36 am

planesarecool wrote:
I don't think people on this website understand the purpose of airlines in developing countries, especially in Africa. They aren't necessarily out to make outright profits as an organisation, but to increase inbound tourism to the country and assist developing industries within the nation.

So no, they probably won't make a profit, but if they help develop the tourism industry in Uganda by bringing in more 'wealthy' tourists, then they are succeeding in their purpose. Same with RwandAir.


Is there a lack of capacity for arrivals to Uganda? No.

If they want to replicate what Rwandair is doing that's fine, but Rwandair is losing tens of millions of dollars with no end in sight.
 
HaulSudson
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Re: Can Uganda Airlines make profits?

Wed Apr 24, 2019 1:23 pm

davidjohnson6 wrote:
USA-Uganda is much too far to even think about. India-Uganda has no flights for historical reasons - if you don't know why read about Uganda's history in the 1970s

British Airways used to fly to Uganda - a bit of subsidy money might get the route to Gatwick reopened. BA's European network means they will always do better than a Uganda based airline

If Uganda wants to boost tourism generally, making things more financially attractive to the likes of Emirates, Etihad, Qatar and Turkish will go a long way and is a relatively cheap and simple way of improving ease of travel while also launching a major tourism promotion marketing campaign in a few target locations. Setting up codeshare deals with Kenya Airways or Ethiopian to boost frequency might also help connectivity

The number of permits issued each day to go watch gorillas in the wild is limited, time consuming and very expensive. Communication to the wealthier people as to why they should holiday in Uganda will likely be highly effective


KQ flies JFK-NBO (flight KQ3) That should be similar, if not a few miles longer.
If I am not mistaken, ugandairlines bought especially the long-range variant of the A330neo, the -800. Perhaps they plan to serve the sizeable diaspora in Boston, who knows. Around Christmas that could be viable. the other 350 days of the year, however...

Uganda currently has very good relations with India, a major part of the business community is Indian - Gujarati. With an Indian partner airline, it might actually work. Competition from EK will be very tough.

The tourism bird won't fly. Ugandan tourism has done quite well, despite the efforts of the government. And they're not gonna improve since they simply do not have a clue. It's private tour operators that pull in the visitors, not any government program. In general, most passengers arriving in EBB are not tourists, but UG diaspora, NGO's, missionaries, expats. Unlikely to change.

A direct link with Germany could be useful (I don't understand why LH/SN/Eurowings never tried this), from MUC or FRA. But without a partner providing connections to other European cities, a bad idea.

A partnership with BA/IAG and direct flights from London could be doable.

But profits, no way.

At the moment, I'd be surprised if they ever start operations.
 
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Devilfish
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Re: Can Uganda Airlines make profits?

Wed Apr 24, 2019 3:52 pm

HaulSudson wrote:
If I am not mistaken, ugandairlines bought especially the long-range variant of the A330neo, the -800. Perhaps they plan to serve the sizeable diaspora in Boston, who knows. Around Christmas that could be viable. the other 350 days of the year, however...

If QU could raise fares to pay for the cost of the long trip to BOS and the government subsidised the other sundry expenses involved, then it might be a plausible route.....

Image


The carrier would just need to get the requisite route authority, or they could make it a one-stopper. They could also send the A338 during the off-peak periods to nearer places where there may be viable demand to offset lower operations costs...and to maximise aircraft utilisation.....

http://www.gcmap.com/mapui?P=EBB-BOS%2F ... =wls&DU=nm


HaulSudson wrote:
At the moment, I'd be surprised if they ever start operations.

In which case, they'd be paying Airbus penalty for the firmed-up A338s :?:
"Everyone is entitled to my opinion." - Garfield
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Wed Apr 24, 2019 8:54 pm

AF022 wrote:
planesarecool wrote:
I don't think people on this website understand the purpose of airlines in developing countries, especially in Africa. They aren't necessarily out to make outright profits as an organisation, but to increase inbound tourism to the country and assist developing industries within the nation.

So no, they probably won't make a profit, but if they help develop the tourism industry in Uganda by bringing in more 'wealthy' tourists, then they are succeeding in their purpose. Same with RwandAir.


Is there a lack of capacity for arrivals to Uganda? No.

If they want to replicate what Rwandair is doing that's fine, but Rwandair is losing tens of millions of dollars with no end in sight.


Ugandan authorities should adjust accordingly the BASA with Ethiopia and UAE, whom airlines filled the void left at EBB to cash cow destinations like 5th freedom rights route to Juba by ET (Kampala is so crammed of South Sudanese businessmen/women laundering or investing so much money coming from nowhere...) plus reducing with Kenya/Rwanda to NBO and KGL with WB and KQ. Also cancelling the FlyDubai rights should be studied in order to promote and add pax on to their planes – maybe not to earn cash immediately. Maybe when launched, the South East Asian diaspora in Uganda will turn up to Uganda Airlines instead if timings are better.
Also, EBB airport sees huge working constructions nowadays to accomodate/welcome more passengers. You should see the glass half full more often for African airlines ;) .
It could be awesome to read such great frequent news from West Africa also :)
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Wed Apr 24, 2019 9:27 pm

evanb wrote:
Could Uganda Airlines make a profit with 4 CRJ900s flying short domestic and regional routes? I don't think it could make substantial profits, but it could be financially sustainable.


Here, the almost official list of domestic airports ( population, plus distance to Entebbe) that can welcome the CRJ:
- Gulu (ULU): 180,000/ 190 mi
- Jinja (JIN): 80,000/ 50 mi
- Kisoro (none): 20,000/ 213 mi
- Soroti (SRT): 55,000/ 180 mi
- New Hoima International Airport (To be ready In 2022): 105,000/ 140 mi (=> Infos also in the East African thread)

Plans position it as an heavy base for oil-related businesses. Surely, government bet on this new source of fresh cash to develop the airline!
Except the last one, which other domestic routes do you see attractive for a future global airline like Uganda Airlines? That's puzzling!
A good idea to fly such near destinations and increase the cycles/fixed costs for a fledging company?

Image



__________________

HaulSudson wrote:
Ugandan tourism has done quite well, despite the efforts of the government. And they're not gonna improve since they simply do not have a clue. It's private tour operators that pull in the visitors, not any government program. In general, most passengers arriving in EBB are not tourists, but UG diaspora, NGO's, missionaries, expats. Unlikely to change.


Huh! You must be kidding right??? :eek:
Take a look at this recent thread on A.net:
viewtopic.php?f=11&t=1415183&p=21084711&hilit=uganda#p21084711

"The Ministry of Tourism has added curvy and sexy Ugandan women to its list of tourism products to attract foreigners, in a bid to grow the sector's revenues and attract more tourists."

In short, government might want to turn Uganda on as Thailand, thanks to ever expanding American/Australian/Scottish large bodies or paunches . Out of curiosity what is the average BMI in the US? Guess that it will entice a few foreign contenders! Business is booming for sure! :smile:

Do you still think they lack of ideas? Seriously?
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
evanb
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Re: Can Uganda Airlines make profits?

Thu Apr 25, 2019 12:01 am

eastafspot wrote:
Except the last one, which other domestic routes do you see attractive for a future global airline like Uganda Airlines? That's puzzling!
A good idea to fly such near destinations and increase the cycles/fixed costs for a fledging company?


Yeah, I was a little overly optimistic about the domestic routes. Hadn't really thought about it. I think the regional routes would be important and viable!
 
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eastafspot
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Re: Can Uganda Airlines make profits?

Tue May 21, 2019 3:22 pm

HaulSudson wrote:
But profits, no way.


Uganda Airlines to make first profit in 2029 - official
"The national carrier will be able to operate and smoothly break even in seven years, and then register a profit after 10 years after which it will be able to run stably."

https://www.monitor.co.ug/News/National ... 4-vsyy37z/

http://kfm.co.ug/news/uganda-airline-to ... -2029.html
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !
 
HaulSudson
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Re: Can Uganda Airlines make profits?

Tue May 21, 2019 5:55 pm

Sure deal. I realise my mistake now.
 
MalevTU134
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Re: Can Uganda Airlines make profits?

Tue May 21, 2019 10:46 pm

eastafspot wrote:
HaulSudson wrote:
But profits, no way.


Uganda Airlines to make first profit in 2029 - official
"The national carrier will be able to operate and smoothly break even in seven years, and then register a profit after 10 years after which it will be able to run stably."

https://www.monitor.co.ug/News/National ... 4-vsyy37z/

http://kfm.co.ug/news/uganda-airline-to ... -2029.html

Is this a joke? I mean...all of it. A president and first lady "inspecting" a regional aircraft most airlines dispose of...a CEO standing in front of Parliament saying with a straight face that they will make a profit in 10 years. Africa sure is a mess...
 
HaulSudson
Posts: 52
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Re: Can Uganda Airlines make profits?

Wed May 22, 2019 7:02 am

No, it's not a joke. It's a very serious scheme (one of many) to embezzle truckloads of govt funds.

All the rest is blablah.

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