Tom Gill

Uganda Airlines is set to go private, with the sale of a controlling stake slated for mid-year.

Six airlines have expressed interest in a yet to be determined majority stake in wholly government-owned Uganda Airlines, according to Michael Opagi, director of the Ugandan government's privatisation unit. The bidders are British Airways, Sabena, Alliance Airlines, Kenya Airways, Air Mauritius and Johannesburg- based Inter Air.

A shortlist was due to be drawn up by mid-May, with a final selection by late July. The government hopes the sale will be concluded by the end of August, says Opagi. The remainder of the shares will be offered to local investors 'at a later date', says the agency.

According to Richard Kyalaugaba, assistant general secretary of the ATGWU which represents ground and cabin crew at Uganda Airlines, the entire 200-300 workforce have not been paid for the months of February and March.

Kyalaugaba adds that the carrier is 'very much in deficit to many people', and up to now 'no-one has offered the government a good deal because it is not in a good financial position' due to 'mismanagement'.

In the last few months it has had 'technical' problems with its leased Boeing 737-200 and 737-500 fleet, according to a source at the privatisation agency. Local press reports say one of the aircraft has been grounded because of engine failure and Air Tanzania is being hired to cover its Nairobi-Entebbe services.

What is in store for the troubled airline is as yet unclear. Sabena aims to 'start up a hub in Uganda'. BA will not confirm whether it has made a bid, while a Kenya Airways spokesman says acquisition is an 'exciting prospect' but refuses to comment on speculation that as a main competitor to Uganda Airlines, it aims to buy up and then close down the airline.

Uganda-based Alliance Airlines, 40 per cent owned by South African Airways and 30 per cent each by the Ugandan and Tanzanian governments, is keen to revive its plan to merge with Uganda Airlines and Air Tanzania in a bid to 'consolidate the markets of this region' and eventually create a single regional carrier.

Fred Obbo, Alliance Airlines general council and corporate secretary, sees a trend towards consolidation in this region of Africa. 'If I were BA or Sabena I would first let this consolidation take place at a local level. If Alliance Air has consolidated itself into a strong regional carrier, it will still have to ally with another major carrier,' advises Obbo.

Source: Airline Business