Now, through its strategic plan, which has been finalized and approved by the National Planning Authority, the airline has come up with strategies to cut back on these costs, one of which is its ground self-handling project, which commenced in November last year.
According to Shakila Rahim Lamar, the head of corporate affairs and public relations at Uganda Airlines, self-handling was projected to start five years after the commencement of operations, but when Covid-19 hit and travel was put on hold, they re-strategized the business plan, started buying equipment, and obtained the necessary certifications.
“With self-handling, Uganda Airlines will be able to reduce its operation costs by 60 per cent and so far the work is moving along well with our operational costs already reducing because we are no longer paying another company to do handling services for us as well as hire equipment,” she said.
With self-handling, all aspects of the customer experience are now managed by Uganda Airlines. These include; passenger check-ins, verifying documents, baggage handling, aircraft grooming, passenger and aircraft security, and ramp services, among others.
Because Entebbe airport is the hub for Uganda Airlines, with all its flights to its 11 destinations starting from there, all the handling services will be done from there, including those for its passengers in transit who go through Entebbe airport. In three years’ time, the airline hopes to also start offering handling services to other airlines that use Entebbe airport thereby bringing in revenue.
Lamar added that the airline has already invested $3 million in purchasing self-handling equipment alone and trained over 200 employees who are going to work on these handling services. Such equipment includes steps, pallets and their movers, dollies, unit load devices, conveyor belts, a ground power unit used to power the aircraft, an air start unit, and staircases.
However, Derrick Ouma, the Uganda Airlines duty manager, said that they have purchased other equipment like ramp buses and high loaders but have nowhere to put them because of the limited space currently at the airport, and because of that, some services may delay. He stated that they require nearly ten acres of land for storing equipment and constructing a hangar (aircraft garage), which they hope to obtain once the airport’s ongoing expansion projects are completed.
“The amount of space we have right now to pack our equipment is slightly over 2,000 square feet, but we need a lot more than that. We have been in talks with CAA, and they have promised to allocate more land. In the meantime, because of the on-going construction at the airport, there is not much we can do, and we don’t want to congest the airport because it can be a source of hazards,” he said.
OTHER COST-CUTTING MEASURES
Another cost cutting measure the airline is looking at is obtaining an Approved Maintenance Organization (AMO) certificate so that they can maintain their aircraft themselves. Uganda Airlines is currently working with the Civil Aviation Authority (CAA) to make sure that they give them the requisite licenses to be able to handle and maintain their own aircraft.
“The cost of maintenance has also aggravated the profitability. For instance; we pay $582,000 to our service provider per month for engine maintenance of our aircraft, which we started paying in January 2022, and that is why the loss made by the airline is now a bit high,” Lamar said, adding that “with the AMO, we shall also be able to have our own hanger and spare parts shop at the airport such that we don’t have to fly our Airbuses to Nairobi or South Africa for maintenance, which is costly.”
In October 2021, Uganda Airlines started its first intercontinental flights by flying to Dubai. Although the airline flies there only three times a week, this has proved to be more costly than profitable. To reduce these costs, the airline intends to buy a medium-range aircraft (for 3 to 6 hour flights) for this route.
“It costs us $15,000 to fly to Dubai. So in order to cut this cost, we need to have a mid-range flight to bridge between the CRG Bombardier and the Airbus so that we don’t have to fly the Airbus to Dubai all the time because sometimes when it goes there, it makes a loss.”
The airline is also looking at developing its cargo operations by purchasing two cargo aircraft, probably within the next five years, one medium-haul and one long-haul, to be able to carry cargo both regionally and internationally, with the aim of making it break even in the long run. By July this year, Uganda Airlines hopes to have added three more routes to its destinations, with Mumbai, India, being one of them.
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