After three years in the skies, Uganda Airlines is embarking on the next phase of network development. The planned expansion will see the flag carrier launch service into West, Southern and Northern Africa, Europe and Asia.
Although Africa accounts for just about 3% of the global air passenger market, it remains the primary catchment area for successful African airlines. Uganda and her neighbours in the East African Community, source upwards of two-thirds of their tourists from within Africa; this holds even with the many barriers that still constrain intra-African travel today.
Consolidating African passenger traffic through offering intra-African and onward connectivity, is, therefore, a key plank in Uganda Airlines’ growth strategy. It also feeds into the broader national goal of turning Entebbe into a regional hub, facilitating travel between Uganda and the rest of the world. For that reason, the airline is looking at Accra and Lagos for its initial foray into West Africa, Sudan in North Africa, London and Istanbul in Europe and Mumbai and Guangzhou in Asia.
The imperatives for Uganda Airlines to play in these markets are many. Our service to West Africa will be a game changer in the sense that it will bring convenience, time and cost savings, for travellers to and from those markets, who now have to go through a third country to complete their journeys. A lot is also changing in the African air transport market and the future promises a vibrant and competitive market for goods and services. Economic growth has spurred a fast-expanding middle class and albeit slowly, African skies are opening up. Well-positioned and adequately resourced air carriers are already reaping from the winds of liberalization.
According to the Uganda Tourism Performance Report for 2022, Africa contributed 87.8% of arrivals to Uganda during the year. According to the same report, between them, Ghana and Nigeria generated a combined 6,914 passengers to Uganda. On average, 133 passengers from Ghana and Nigeria were arriving in Uganda every week, during the year. However, coming against a background of the Covid-19 restrictions to travel, that number was just over a third of the 16,061 passengers from Ghana and Nigeria that visited Uganda in 2016.
It is also worth noting that in the absence of direct air services, they travelled to Uganda through indirect routing. Those numbers, however, do not show the full picture of potential traffic between the two points for Uganda Airlines because they only represent, origin-to-destination travellers to Uganda. The potential traffic is much higher if Uganda had a home carrier to offer onward travel to destinations beyond Africa or further within the continent.
With the African Continental Free Trade Area (AfCFTA), taking off and the Single African Air Transport Market SAATM gaining traction, intra-African travel can only grow exponentially. There is also a lot of travel between Africa and Asia. According to Anna.aero, in 2018, the China-Africa market was 2.5 million passengers. The bulk of these were ferried by a handful of airlines with the Gulf carriers playing a prominent role. Uganda’s geographical location relative to Ghana and Nigeria puts Uganda Airlines in a good position to play in the huge Africa-Asia connector market.
At 10,021 passengers in 2016, Khartoum remains one of the largest unserved markets out of Uganda today. That number translated into 192 passengers between Uganda and Sudan weekly. It can be argued that the absence of direct scheduled air services, is a binding constraint to the potential for traffic on that route. Rarely spoken about, is the huge potential for commerce between these two countries. Data from the Uganda Coffee Development Authority shows that Sudan is the second largest buyer of Uganda’s coffee, after Germany. The biggest producer of commodities like Sesame in the world, Sudan is also a potential supplier of many agricultural products, including sugar, that Uganda imports in substantial quantities. The absence of practical surface transport and functional air links, has stunted commercial interaction between these two markets. Most people that travel between Kampala and Khartoum, do so through a third-country such as Kenya, Ethiopia or Egypt. Opportunities for Uganda in Khartoum could be wheat, fruits and vegetable exports. Several youths in Khartoum find Uganda conducive for vocational education. Uganda could be developed as a honeymoon destination for these points.
London is one of the routes Uganda Airlines will be launching in the near future. The United Kingdom is home to a vast Ugandan resident population and also a big source of tourists. According to SABRE, 76,705 people travelled between London and Entebbe in 2016. That was an average of 210 people travelling between Uganda and the United Kingdom every single day. According to OAG data, in 2019, the last year of normal travel before the onset of the Covid-19 pandemic, that number had climbed to 84,000 annually or 230 passengers departing Entebbe daily for the United Kingdom. Because there has not been a direct air service between Entebbe and London since British Airways exited the route in October 2015, those numbers represent a huge opportunity for an airline operating direct from Entebbe. The same data suggests that with a well-coordinated schedule across the network, the service to London has a transit traffic potential in excess of 245,000 passengers.
Passengers aside, the UK is a prime market for a lot of Uganda’s fresh foods, fruits and flowers. A big African population combined with a reliable and cost-effective air-bridge, would support Ugandan farmers whose output is increasing through programs like Operation Wealth Creation. OWC estimates that farmers under its programs can generate up to 20 tons of exports of fresh foods weekly.
China has over the past two decades emerged as a major source market for consumer and industrial goods for Uganda and Africa in general. From 23,122 passengers in 2016, the market between Entebbe and Guangzhou increased to 29,000 passengers annually in 2019. Promotional campaigns by Uganda Tourism Board over the past few years have also seen China emerge as a tourism source market. The Uganda Tourism Board lists it as the fourth largest primary tourist market, accounting for 6.5% of the tourists that visited Uganda in 2019. Industry data puts the potential transit market in excess of 80,000 passengers annually.
Since India first made contact with East Africa nearly half a millennia ago, commercial and cultural relations between Africa and the Indian sub-continent have only grown stronger. Uganda has a 20,000-strong resident Indian community and the country is one of the biggest sources of inbound foreign direct investment. Many Ugandans also travel to India for business, medical care, big pharma, and tertiary education. This has created a strong spine for travel between the two countries. India was the top primary overseas market for Uganda tourism, accounting for 28.4% of visitors in 2022. Potential transit air passenger traffic between Mumbai and Entebbe is estimated at 112,000 individual trips annually.
Uganda Airlines plans to launch its service to Mumbai in the coming months. That will be the first time that travellers between Uganda and the Indian sub-continent enjoy the convenience and economy of direct air services.
Overall, activating the above markets and others in Southern Africa will help to grow Uganda as a business and leisure destination and boost Uganda Airlines’ ability to shape market behaviour out of Entebbe. So far, Uganda Airlines accounts for 20% of all departures out of Entebbe. Overall, all the airlines that operate scheduled services to our international gateway, directly provide services to only 28 airports in 17 countries. Launching service into the new points will take that tally to 35 airports in 25 countries, bring Uganda closer to her regional peers and boost traffic through Entebbe. For contrast, Addis Ababa serves 107 airports in 62 countries, Jomo Kenyatta 66 airports in 41 countries, Dar es Salaam 33 airports in 19 countries and Kigali 21 airports in 17 countries.
While our ramp-up has been slow, there is reason for optimism. The good news is that the global consensus now is that the response to the Covid-19 pandemic was mostly bungled up and caused unnecessary pain. As a result, many countries have opened up and international travel is again looking up. China, the last market to open up, has also relaxed its Covid protocols and the major airlines are looking forward to the strongest summer season since 2019.
Now we need to sharpen the sword and develop these new routes in terms of increasing value addition for exports. Consistency, quality and the right packaging will push-up demand for our product offering among other barriers that may differ in these markets. We need to fill up the Airbus belly for the long-haul destinations. The opportunity is nigh.