East African to be back and Victoria Intl. to take off
Hi there, East African Airlines that had to stop flights due to financial difficulties is now trying to get back into the market by the last month of the year, starting off with Entebbe-Nairobi-Johannesburg flights. At the same time Ugandan long-awaited start-up Victoria International now seems to really be starting flights, the first planned for October 1. Now let's see what will come out of that. What aircraft are they going to fly? Sure a lease, I would say... Okay, for further reading: an article by the Arusha Times (Arusha): Uganda's East African Airlines is expected to be back in operation later this year after it won a reprieve from creditors. The carrier, which flies the Ugandan flag after it was designated national airline, hopes to launch the Entebbe-Nairobi and Johannesburg routes when it resumes operations between November and December this year. It is also expected to have a go at the Entebbe-Dubai route. "We will try to be ready after October but for now, we are focusing on getting back into Nairobi-Johannesburg," EAA managing director Fredrick Ochieng-Obbo said last week. At the same time Victoria International Airlines, in which the Uganda government is a 25 per cent equity partner, has announced plans to launch services on October 1. But with both carriers targeting the three already congested regional routes, the developments is a potential designation nightmare for the Uganda Civil Aviation Authority, which must allocate frequencies to the new entrants. The Entebbe-Nairobi route on which Kenya Airways is currently the sole operator and Entebbe-Johannesburg, currently shared out between Kenya Airways and South African Airways, feature in both carriers' plans for the first phase. EAA pulled out of the Nairobi route in July 2004 and Johannesburg in February 2005 in the face of a mounting discrepancy between revenue and expenses which culminated in a cumulative debt of $6.8 million. The carrier announced plans to return to its routes, after a July 31 creditors' meeting that approved its restructuring and 90 per cent debt waiver. In the meeting granted by the Uganda High Court, 39 out of 43 creditors, representing a value of $4,498,294 or 83 per cent of the total debt, voted in favour of the compromise plan while four creditors were against the resolution. In effect, EAA's debt has been reduced to just $680,000, in an approach that is unprecedented for distressed Uganda companies that are often left at the mercy of receivers. Commenting on the potential conflict with Victoria International Airlines, which because of the public equity holding, might be construed as a national carrier, Mr Ochieng-Obbo said he would explore possibilities of converging the two carriers' strategies so that they could face the competition as a united front. "At the end of the day, it has to be acknowledged that Uganda is a relatively small market and the simultaneous entry of two Ugandan carriers into the market is bound to cause confusion and uncertainty," Ochieng-Obbo said, arguing that the two would be better off harmonising and consolidating their common objectives. EAA is also evaluating Kenya Airways, Ethiopian Airlines and South African Airways as potential strategic partners to help the nascent airline achieve core competences ahead of seeking the IATA (International Air Travel Association) Operational Safety Audit that will be due in six months from the launch of operations. The Ugandan Civil Aviation says that while "it is better to have more airlines than less or none," the regulator will allocate frequencies, only after evaluating the business plans presented by both applicants against the available market on the proposed routes. "If we find the route congested, we shall advise them of available alternatives," CAA spokesman Ignie Igundura told The EastAfrican. Mr Igundura added that there were many idle frequencies such as Kinshasa and Lagos and Accra, which the government negotiated years ago but had not seen a single carrier apply for, save for a couple of regional operators flying to Eastern Democratic Republic of Congo. EAA will launch with a $15 million budget and will be using a leased Boeing 737-300 aircraft for its core operations and an older Boeing 737-200 for backup. After consolidation of the first phase in which it will primarily operate on the African continent, the carrier plans to resume flights to Dubai. Phase three will see the re-launch of services Europe and Asia. The European operation is likely to mirror the schedule of the defunct Alliance Air with the flights originating in Dar es Salaam through Entebbe to London. Cheers, Felix