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Alliance becomes SA Alliance

Michael Wakabi/Kampala

Alliance Air has acquired a Boeing 767-200ER on a three-year renewable lease from shareholder South African Airways (SAA), replacing the ageing 747SP the Uganda-based carrier has operated for the past four years.

The two airlines also started a codesharing agreement with effect from 6 February. Alliance aircraft have already been rebranded to reflect the new partnership, which is trading as SA Alliance on its routes to Europe from East Africa.

Alliance Air manager for Uganda, Alice Katiti, says that the partnership will help give the carrier a visible presence worldwide, access to a wider network and seamless connections with all SAA flights. The airline is owned jointly by SAA, the Tanzanian and Ugandan Governments, Air Uganda and Air Tanzania.

The 767, which started services earlier this month, is on a wet lease with South African pilots and Ugandan and Tanzanian cabin crew. The switch in aircraft is part of a major strategy change Alliance is adopting to reduce an operating deficit that had accumulated to $32 million in the first three years of operation.

Management sources say the Alliance board aims to break even in financial year 1999/2000, which starts in April. It is dropping loss-making routes and reining in the high volume of cut-price tickets released for sale. The carrier has closed the weekly flights to Kilimanjaro in Tanzania, citing high costs at the airport.

Alliance Air deputy managing director Ochieng-Obbo says: "The cornerstone of our turnaround strategy is to get out of activities that don't make money. Kilimanjaro was not making money for us."

Acquisition of the 767 will improve operating economics, even though it has 49 fewer seats than the 747SP. Alliance was operating at an average load factor of 68% on the larger aircraft. The new service operates with an economy and business class configuration, having dropped first class.

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