Uganda Airlines is targeting annual revenue of between $400 million and $500 million by 2030. However, restrictions linked to Uganda's non-participation in the Single African Air Transport Market are limiting its ability to carry passengers between some foreign destinations. Chief Executive Officer Girma Wake says the airline is working to address the wider question of participation in SAATM.
Ghana has granted Uganda Airlines fifth-freedom rights to carry passengers between Accra and Lagos. However, the carrier is yet to use those rights because Nigeria has not approved the arrangement. Wake said the airline was negotiating with Nigerian authorities while working with the Ugandan government to address the SAATM restrictions.
The restrictions come as Uganda Airlines seeks to increase passenger traffic by between 12 and 15 per cent annually, expand cargo operations, and reach break-even by 2031 before moving into profitability. The airline initially serves Accra through Lagos, combining passengers from both West African markets on a four-times-weekly operation.
Ghana's approval awaits Nigeria's agreement, and until that approval is secured, the carrier cannot use Ghana's authorisation to sell the regional sector. A similar difficulty has affected efforts to carry passengers between Harare and Johannesburg. Zimbabwe agreed to the arrangement, but South Africa did not, Wake said.
SAATM seeks to liberalise air services among participating African countries, allowing airlines greater access to markets across the continent. Uganda's position outside the arrangement was intended to protect its national carrier, according to Wake. However, he argued that this had not delivered the expected protection because Uganda had continued allowing other airlines access to its market.
The airline is working with the Ministry of Works and Transport, the Ministry of Finance, and other government institutions to resolve the matter. Management intends to build demand before opening new routes, rather than depend on passengers originating in Uganda alone. The combined Lagos-Accra operation is intended to develop demand before Uganda Airlines commits separate aircraft capacity to each destination.
The financial recovery plan combines passenger growth with cargo revenue, lower operating costs, and additional aviation services. The carrier then expects to reach break-even by 2031 and move into profitability thereafter. Achieving that will require the airline to earn more from its network while reducing expenditure on services it could eventually provide itself.
Key points
- Uganda Airlines targets $400-500 million in annual revenue by 2030.
- SAATM restrictions limit Uganda Airlines' expansion.
- The airline aims to reach break-even by 2031.
