29 June 2014

Uganda: Local Airlines Counting Losses

Photo: Entebbe airport
Entebbe International airport.

Three local airlines including Air Uganda planes have been grounded at Entebbe following a decision by the Civil Aviation Authority (CAA).

Effectively, the airlines have been suspended from landing or taking off at all international airports following a recent audit of the CAA by the International Civil Aviation Authority (ICAO), the regulator of the global aviation industry.

Two other companies, Uganda Air Cargo owned by the government and supervised by the Defence ministry, and TransAfrik Airlines, are also grounded.

Uganda Air Cargo operates un- scheduled cargo flights to Juba, Kenya, Dubai and serves various humanitarian services in countries like Southern Sudan and Democratic Republic of Congo (DRC) while TransAfrik also operates cargo flights. Obviously, the losses they are making are crippling.

Air Uganda CEO Conwell Mulewa told The Independent on June 21 that indeed they are making losses but declined to comment further. "It's a Civil Aviation regulatory issue and I can't talk about it. Yes, when we are not flying we are making big losses and it's a big blow to us. However I can't help you much, get in touch with the CAA," he said.

On June 19, Muleya issued a brief press release in which he stated that the ICAO had concluded a review of Uganda Civil Aviation systems, structures and operations after which the airlines registered in Uganda received notification from the Civil Aviation Authority that all Air Operator Certificates (AOCs) for International Operations had been withdrawn and a new recertification process would be undertaken.

The AOC is the document that allows airlines to mount flights and without it, airlines cannot operate their air services. "That is why we have been unable [to] operate flights since June 17 when the notice was received. Air Uganda is working closely with the CAA to complete the processes required to resolve the matter in the shortest possible period," he said. "We will keep you advised of developments in this regard."

He added that options are available for customers with existing bookings made on or after June 17 to arrange for alternate flights to their destination or to get a refund.Works and Transport Minister Abraham James Byandala suggested that the suspension of the three airlines was inevitable because Uganda would have been blacklisted by ICAO. "Yes, it was a drastic action but it was the only alternative to a worst case scenario," he said.

He said the government has started on a system of re-certification of the three airlines by filling the gaps that led to the suspension of their licences. Also,the government has engaged the ICAO to expedite the process of returning the airlines to the skies. "We will ensure that the airlines adhere to the required standards at all times so that this scenario should never occur again," he said.

Growing bigger

Operating a fleet of three CRJ-200 jets, and one MD-87, the airline under the code U7, flies to eight regional destinations from Entebbe to Nairobi, Mombasa, Dar es Salaam, Kilimanjaro, Bujumbura, Kigali, Juba in S. Sudan and Mogadishu in Somalia. The available alternative airlines for its customers include Rwandair and Kenya Airways. It is not known how long the re-certification process would take, neither is it clear how and why CAA was not performing its job according to international best practices and to the satisfaction of the ICAO.

CAA has declined to issue any statement about the suspension. But a source at the aviation body dismissed accusations of incompetence on their part saying the airlines are to blame for the troubles.

"The three airlines' problems have been ongoing. They have been warned a number of times but ignored the warnings. As the CAA we cannot let them fly because we will be blacklisted and no aircraft will ever be allowed to land or take off from Entebbe airport," said the source on condition of anonymity. But sources said that would still render the CAA culpable and the ICAO auditors laid the blame squarely on the Ugandan regulator's door - faulting their control procedures and non-adherence to international best practices for aviation control and administration.

The fall guys

The Independent has learnt that although the airlines had ensured maximum compliance with all the CAA rules and control requirements, ICAO found that CAA's own standards were below par, which means that the airlines had to become the 'fall guys.' Aviation is one of the most regulated industries in the world and any finding that the regulator is not complying with international standards can be potentially damaging. It is not clear what action the line ministry, the Ministry of Works and Transport is likely to take on CAA as a reaction to the embarrassment it has caused to Uganda.

Following the demise of Uganda Airlines 15 years ago, Air Uganda, operated by Meridiana Africa Airlines (Uganda) Ltd, has been the de facto 'national carrier' for Uganda since 2007. Just last month, Air Uganda became the newest member of the 240-member International Air Travel Association (IATA) just weeks after joining the African Airline Association.

Meridiana Africa Airlines is owned by the Celestair Group, a subsidiary of the Aga Khan Fund for Economic Development. In December last year, reports emerged that President Yoweri Museveni was considering making the government a shareholder in the airline, which could potentially lead to more investment into a bigger fleet. The airline is said to have a very bright future having gained immense popularity since inception because of its excellent customer care and affordable rates. It also maintains interline partnerships with various regional and international airlines.

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