New, hungry and aggressive Air Uganda has big plans for Entebbe

When he took over the helm of the Entebbe based Air Uganda, in May 2009, Hugh Fraser was clear about his mission — rightsizing the carrier to the demands of the market and reducing costs by 30 per cent.

It is part of a new development strategy that Mr Fraser says will see the two-year-old carrier come closer to break-even point.

The early phases of the programme are already bearing fruit and Mr Fraser, who is the chief executive officer as well as the aviation director, is almost certain this will happen towards the end of next year.

Initially, the airline hoped to achieve the break-even point last year but a spike in global oil prices soon after it launched impacted negatively on its operations.

“It has been very costly running the airline, but it is not too difficult to address the most serious cost overruns. We have gone some distance and we are on a positive course,” said Mr Fraser.

The plan involves getting a new fleet and reducing the head count to deliver a leaner and more flexible operation that will position it better in the region’s market.

Already, Air Uganda which is owned by the Aga Khan Fund for Economic Development, has replaced three 99-seater Mac Donnell Douglas MD 87 aircraft with a pair of the more fuel efficient 50-seater Canadian Regional Jet (CRJ200) series.

The move to smaller jets that require fewer crew has resulted in 40 jobs less or 26 per cent reduction in head count.

It has also allowed the carrier to reinstate its morning service to Nairobi and to lay on direct flights between Entebbe and Mombasa.

Dar es Salaam is now served six times a week while Mombasa is served three times weekly.

Flights to Zanzibar, which were initially linked to the Dar service, have been decoupled and are now linked to the Mombasa service.

More recently, the airline launched a daily service to Kigali.

“We are increasing frequency to give a better product and we hope to soon offer daily flights to Dar es Salaam. Our Kigali flights complement the existing product by Rwandair,” Mr Fraser said.

Mr Fraser observed that while Kigali is the airline’s third busiest regional route after Nairobi and Juba, a lot of Kigali-bound traffic still transits through Nairobi, at a higher ticket price.

To claw this back and offer more convenient direct connections between Entebbe and Nairobi, Fraser is working closely with Rwandair.

“We now operate 17 flights a week between Uganda and Kenya so we are becoming a significant airline in Uganda. The more the network grows, the more we can provide quality services not only to Uganda but to the rest of East Africa,” Mr Fraser said.

Besides an ongoing review of new routes to the DRC, Air Uganda is also evaluating other points in Tanzania, Burundi and Sudan.

The airline will focus on developing Entebbe into the fastest connecting hub in the region by offering 30-minute connections within its own network.

“It is an ambitious target but it is possible in Entebbe which is not congested,” said Mr Fraser.

Combined with “value” to Kigali or Nairobi, Mr Fraser believes frequency of flights is what will drive Air Uganda’s growth over the next couple of years.

Describing the airline as “new, hungry and aggressive,” Mr Fraser said his base fares are not a gimmick and are available on many seats across all flights on his network.

Repositioning

Citing the highest costs for an airline as those directly related to operations, flight crew and engineering, Mr Fraser is optimistic his cost reduction measures will add up.

“Once you streamline the fleet, you can concentrate on one type of aircraft. That removes the need for two types of spare parts, double qualified engineers and cockpit crew.”

Although the transition to a single fleet is not yet complete as Air Uganda still maintains one MD87 as back up and to provide capacity when demand is heavy, he considers himself lucky to have a fallback position.

“The backup capacity allows us to get an aircraft up in one hour. It is important in terms of schedule integrity and being perceived as reliable, especially from the perspective of the business customer.”

Eventually, Mr Fraser expects to make a full transition to the bigger jets from the Bombardier family to replace the MD.

With network and equipment issues seemingly settled, Fraser is looking to cut expenditure on rent by relocating the head and sales offices as well as consolidating the operations and airport offices.

“This place looks beautiful,” he said of the Kololo head office which occupies two acres of land.

“But you don’t need all these gardens to run an airline. Besides, keeping them neat comes at a cost.”