The region’s national carriers have experienced a turbulent week. Hope seemed to dim further for Kenya Airways, which announced heavy losses —again —just as Air Tanzania grappled with the seizure of one of its aircraft in South Africa over a 37-year-old debt .
For Uganda, whose relaunched flag carrier Uganda Airlines started commercial operations, the two events amplify the multiple perils it faces as it rejoins a business it quit amid mounting debt nearly 20 years ago.
Ethiopian Airlines, the only carrier in the region that is profitable, is also facing bad PR over the Flight ET302 crash in March that killed all 157 passengers and crew on board.
More petitioners have joined a $1 billion compensation suit filed at a US federal court by top American law firms against aeroplane manufacturer Boeing following the crash.
KQ’s half-year loss widened by a staggering 112 per cent to $81.7 million, from $37.2 million posted for the same period in 2018.
Air Tanzania suit
At the same time, on August 22, a court in Gauteng, South Africa, allowed Hermanus Pillipus Steyn to attach one of Air Tanzania’s (ATCL) Airbus A220-300 series over a $33 million claim against the government.
Mr Steyn’s claim is tied to an almost four-decade-old case that arose from Tanzania’s failure to compensate him for property it nationalised in the 1980s. He was expelled from Tanzania in 1983, after the government nationalised his livestock and seed multiplication farms in the Arusha region.
KQ’s reversal of fortunes highlights the market risks Uganda Airlines is flying into while the seizure of the ATCL aircraft brings alive the political risk its planned operations to the Democratic Republic of Congo face if the latter chose to invoke an outstanding $10 billion claim the International Court of Justice awarded it against Uganda for alleged illegal occupation and plundering between the late 1990s and early 2000s.
Uganda Airlines launched operations on August 28, with services to seven destinations within Eastern Africa. It plans to start services to Kinshasa in 2021 after the two Airbus A330Neos it has on order join the fleet.
Monica Ntege Azuba, Ugandan Minister for Works and Transport, however told The EastAfrican that there is minimal risk that Uganda Airlines’ assets risk seizure in the DRC.“I don’t foresee that and even then, the insurance policy we have taken out for the airline covers it against such risks,” she said. Uganda Airlines code Jennifer Musiime, the carrier’s commercial director, said […]