Air Uganda suspension big gain for Kenya carrier

Kenya Airways is set to be a major beneficiary of the grounding of Air Uganda, which was the national carrier’s biggest competitor on the eastern Africa routes. Air Uganda suspended operations indefinitely on June 17 after its licence was withdrawn by the Uganda Civil Aviation Authority (CAA).

READ: Air Uganda suspends operations indefinitely

The airline used to fly from Uganda’s Entebbe airport to Nairobi, Dar es Salaam, Bujumbura, Kigali, Mogadishu, Kilimanjaro, Mombasa and Juba; connecting the regional cities.

Air Uganda says its potential re-certification is weeks away and that lessors have recalled their aircraft, opening a window for carriers like KQ to grow passenger volumes in the regional destinations.

KQ flies from Nairobi to Tanzania, Uganda, Burundi, Djibouti, Sudan and Rwanda, making it a major player in the eastern Africa aviation market. The national carrier draws 58 per cent of its revenues from African destinations, with the regional cities forming an important part of its Pan-African network.

Its margins are set to come under pressure in the medium term as its plans to take up to Sh87 billion debt to buy new aircraft, underlining the importance of revenue growth for the loss-making airline.

It remains unclear when Air Uganda may resume operations but the airline said its grounding has seen it record major losses. “Air Uganda, which is the only scheduled passenger airline affected, has inevitably suffered the greatest damage,” the airline’s CEO Cornwell Muleya said in a Friday statement.

“Each carrier was requested to submit a fresh application for an AOC (Air Operator’s Certificates), and in the meantime was required to cease operations, thus forced to incur massive financial losses on a daily basis and suffer reputational damage.”