Monday, July 14, 2014


In case you missed it the talk burning the wires was about the new rate of a flight on Entebbe-Nairobi route.

A same day return flight will now set you back about sh1.6m compared to sh800,000 at the beginning of the year. Kenya Airways once again monopolises the route following the suspension of Air Uganda last month.

The route has reverted to its status as one of the most expensive routes per kilometer in the world.

How did we find ourselves here?

The folding of Uganda Airlines more than a decade ago, set the stage for Kenya Airways to set up a monopoly on the route. The way these things work is that countries have bilateral air agreements, which means they license designated carriers from either country to fly into their respective airports. Other airlines cannot fly passengers between the two countries unless both agree to it.

So over the last several years Air Uganda has been our designated carrier and Kenya Airways served as our eastern neighbour's. so when Air Uganda stopped flying Kenya Airways increased the number of frequencies to Uganda -- to the extent that they could manage, to fill the gap.

Maybe they would have maintained the cost of a flight out of the goodness of their hearts, but "the pride of Africa " has been suffering losses in recent years and their management will only be too glad to earn a few more dollars wherever they can.

As a nation we are in a rather precarious position with no bargaining power to speak of.

Uganda and Kenya are each others largest trading partners. We both house huge numbers of our respective populations for historical reasons, more so than either of us do with Tanzania. We travel back and forth on holiday, to school or hospital. Granted that most of our exchanges are by road, but the Entebbe-Nairobi route carries enough of this interaction to make the route one of Kenya Airways major cash cows. So the route has to remain open.

The possibility of allowing another airline to be our designated carrier along the route will be fiercely opposed by the Kenyans. Ethiopia Airways tried after Uganda Airlines went down but made no headway. In the early part of the 2000s East Africa Airlines tried to break Kenya Airways stranglehold on the route but the resistance was such that it was forced to shut down and put its sister business, ENHAS cargo handling at a distinct disadvantage when Kenya Airways withheld its business.

It's times like this that we are really exposed to our over reliance on Kenya. The other times of course is when there is interference in the traffic between our border and the Kenyan coast, which route again dominates or land communication options.

The East African Community is doing a good job in raising our sense of interdependence on more tangible basis than political rhetoric, but even there we can see how the field is far from even.

Some saber rattling by our leaders may come in handy in redressing some of this unfairness, but the more sustainable solution is for us to diversify our communication options in the short run, but in the long run to grow our economic clout to the point where we can enjoy real bargaining power.

Of course there is the group, that jumps out of the wood work every so often, to use such times as a justification to push for our own airline. Yes. If we had our own viable airline the Kenyans attitude would be very different. Unfortunately starting and building an airline is not done with a snap of the fingers. And the opportunity costs of sustaining one in terms of lost investment in other infrastructure and social services make it difficult to justify. Ask Rwanda.

We shall not examine too closely how Kenya Airways established its advantage but clearly their dominance on the route is not about to go away.

It seems that we are in for a highly priced route, at least until Air Uganda extricates itself from its mess. If it can.

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