1 February 2013

Uganda: Govt Weighing Stake in Air Uganda

The Government is considering buying into Meridiana Africa Airlines which trades as Air Uganda in efforts to increase international export volumes, cut costs and revive a national carrier.

"Having a national carrier will increase trade volumes. The Government is looking into acquiring equity in Air Uganda, first, for the operation of cargo services," trade minister Amelia Kyambadde said.

Fresh fruit exporters, farmers and the tourism industry have been vocal in support of a national carrier to boost the economy, while critics argue that a national airline is capital intensive with a low return rate.

The national carrier, Uganda Airlines, was liquidated in 2001 after high maintenance costs and low revenues forced it under.

James Kanyije, the proprietor of KK foods, a perishable food exporter, says a national airline will significantly reduce costs associated with acquiring foreign exchange to pay to foreign fliers to transport their cargo.

He said the Government should support farmers who export agribusiness because it brings in a lot of foreign exchange.

"Much is lost to multi-international companies who come here to make a profit without putting favorable conditions for the Ugandan people," Kanyije explained.

Transport minister Eng. Abraham Byandala said the President Yoweri Museveni has met the Aga Khan about buying into the airline.

The Aga Khan-run Air Uganda is now recognised as the quasi national carrier and has been in operation for five years.

The airline has two 50-seater planes and two 99-seater planes and flies to seven destinations across East Africa with access to West Africa and Europe through its Celestair Group affiliation.

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