Uganda Airlines: Prioritizing Reliability Over Profitability

• Uganda Airlines' acting CEO Ato Girma Wake has made reliability his top priority.
• The airline had nearly 60 percent of its fleet capacity unavailable when Wake took over.
• Wet leasing, a costly practice, was used to maintain schedules, but is now being phased out.
• The airline's Airbus A330 and CRJ are expected back in service soon, reducing dependence on wet leases.
• Wake aims to create a reliable schedule that allows for seamless connections onto onward flights.

Before an airline can become profitable...Before it can grow...Before it can compete...It first has to become reliable.

When Ato Girma Wake took over as acting chief executive officer of Uganda Airlines five months ago, he inherited a airline with significant operational challenges. The airline's fleet capacity was severely underutilized, with nearly 60 percent of its aircraft unavailable for service. This meant that the airline had to rely on expensive wet-leased aircraft to maintain its schedule, incurring significant costs and eroding profitability. Wake has made it clear that reliability is his top priority, and that the airline must become reliable before it can grow or compete.

Wet leasing, a common practice in the aviation industry, involves renting aircraft with crews and operational support. While it may seem like an easy solution to maintain schedules, wet leasing comes at a steep price. According to Wake, operating wet-leased aircraft is almost three times more expensive than dry lease arrangements, where the airline provides its own crews and operational support. This means that every month spent relying on wet leases erodes profitability, making it essential for Uganda Airlines to reduce its dependence on this costly practice.

The tide is turning for Uganda Airlines as the airline's fleet capacity begins to return to service. The Airbus A330 is expected back in January, and a grounded CRJ will be returning within weeks. Additionally, three additional engines are undergoing maintenance under a contract programme, allowing aircraft to gradually return to service as scheduled maintenance cycles are completed. As capacity returns, dependence on wet leasing should reduce, leading to lower costs, better utilisation, and improved schedule reliability.

Wake's vision for Uganda Airlines is to create a reliable schedule that allows passengers to seamlessly connect onto onward flights. He wants the airline to build a banking system, where arrivals are scheduled within narrow windows, allowing for efficient connections and dispersal of long-haul passengers across East and Central Africa. This approach has been successful for other hub airlines like Ethiopian Airlines, Emirates, and Qatar Airways, and Wake is confident that it can work for Uganda Airlines as well.

Reliability is not just a nicety for Uganda Airlines; it's a necessity. A reliable schedule can impact passenger confidence and demand, making it essential for the airline to get this right. By prioritizing reliability, Wake aims to create a stable foundation for the airline's growth and competitiveness in the region.

Lawyers and compliance officers should monitor Uganda Airlines' progress in rebuilding its fleet capacity, as reliable operations are crucial for the airline's profitability and competitiveness. A reliable schedule can also impact passenger confidence and demand.

Source: Original reporting via Uganda Airlines - The Architecture of a Turnaround