Mon, 11 Feb 2008 04:29:43  

    By Leo Odera Omolo
  
  News emerging out of Kampala says that Air Uganda has signed its first interline agreements with international carriers, a sign of acceptance by peers that potentially opens up access to larger market.
  
  The airline’s Chief Executive (CEO) Peter De Waal was recently quoted by the local media as saying, it had signed agreements with Brussels Airline, KLM and Air Tanzania. Virgin Atlantic, Emirates and Qatar Airlines are expected in the next six or five weeks.
  
  Interline agreements are one – to-one arrangements under which airline agree to accept and carry passengers holding either carriers’ tickets.
  
  Crucially for Air Uganda, getting interline agreements out of Nairobi boosts its revenue potential as it can now sell destinations beyond its current route network.
  
  Until now Air Uganda competed with the well established Kenya Airways on the Nairobi . Entebbe route with slightly over 35 per cent of the market. The interline with the north bond and Middle Eastern Airlines have widened the scope of competition to more than 90 per cent of departure on the route.
  
  Mr. De Waal was further quoted as saying “ We have been criticized for not being low-cost, but our focus has always been to build a quality airline that will always be around to serve the traveling needs of the public into and out of Uganda. Theses interlines are a vindication of our strategy and evidence that we are not fly-by-night investors”
  
  Since the collapse of an interline agreements with erstwhile Ugandan carrier East African Airlines in July 2004, Kenya Airways has enjoyed a virtual monopoly on the route. Attempts at competition by Ugandan Airlines fell by the wayside as they struggle for a slice of the small, but lucrative point-to-point market.
  
  According to the Air Uganda’s CEO there is little value in head-to-head competition with Kenya Airways, so they have been to Nairobi to propose an interline.
  
  Analysts were of the opinion that although Kenya Airways has the upper hand on the route, it would still make good business sense for it to sign up with Air Uganda given the frequent cases of over booked and delayed flights that have bedeviled the Kenya flag carrier in recent past.
  
  The agreements come weeks ahead of a change over from the leased fleet of DC 9-31 aircraft that the carrier started off with in the middle November 2007, to the bigger and newer MD-87 series. The first of the pair is scheduled to arrive in Entebbe on March 1st 2008 while the second of the type is expected on May 15.
  
  The aircraft, which have been undergoing major maintenance checks at Air Uganda Parent Meridiana Airlines base in Florence, Italy, are configured to cabins of 20 business and 79 economy class seats.
  
  Mr. De Waal, says the new fleet will improve Air Uganda’s operating position because the MD-87’s burn 72 percent less fuel than the DC-9, while the larger capacity of the airline and engines will allow un restricted operations.
  
  “Currently, we have to fuel in Juba even though jet fuel is 40 percent more expensive there compared with Entebbe. With the new aircraft, we will be able to carry the fuel for the return journey as well, The CEO said.
  
  Once the new aircraft are delivered Air Uganda is looking forward to add at least three new routes- one in East Africa and two to West Africa- to its current schedule by year end while Juba, Dar Es Salaam are also expected to graduate to a daily service by that time.
  
  
  “ We are studying the options for an East- West connections out of Entebbe, but for now we are concentrating on building the feeder network” , said the CEO
  
  Equally the carrier will not be venturing into long-haul flights until its regional network has matured, but it is projecting rapid growth that should see it take 40 per cent of the market by the end of the year 2009.
  
  The carrier recently joined hands with Speke Resort Hotels to introduce holidays and special packages to Uganda from Kenya. Ten tour operators from Nairobi were hosted at the Speke Resort on January 24th as a start. Also to be introduced are packages to Queen Elizabeth and Murhisan Falls national parks, Both in Uganda
  
  ENDS
  leooderaomolo@yahoo.com