Uganda: Low Passenger Numbers Forced Out Gulf Air – CEO

Kampala — Gulf Air has said it exited Uganda after it concluded the country’s low air traffic would not allow it realise strategic investment prospects.

The airline that had re-entered Uganda at the close of last year – after existing in 2003, surprised the airline business announcing it would beginning March 2, suspend its Entebbe flights due to low yield transit traffic and operating under losses.

Mr Samer Majali, the airline’s group chief executive officer, explained in a statement that the Entebbe Route had, for the three months of the airlines re-entry, shown less or no growth prospects for the airline. He said: “We were operating under losses characterised by low yield transit traffic. Thus we decided to close and focus on higher yield point-to-point traffic.”

Mr Majali, also said the suspension of the Gulf Air Entebbe flights was taken in line with the company’s business strategy seeking to review existing route network and fleet. However, Civil Aviation Authority dismissed the claims saying, Gulf Air should have known Uganda’s market condition if it had cared to conducted a proper market feasibility study.

Mr Igni Igundura, the CAA public affairs manager, said Gulf Air’s harried exit will hurt Uganda’s airline market confidence; however, the airline should have known that conducting a market study was priority number one. “If the route is not that busy, as Gulf claims, then why have other airlines not existed? How did it notice the route’s unviability with only three months of operation,” he wondered.

Mr Majali said the suspension of the Entebbe flights would give the airline additional aircraft capacity to deploy in demand-driven routes and free up resources to explore new opportunities for passengers.

Uganda has in the last five years seen impressive growth in its airline business, accelerated by growth in tourism, growing business environment and the recent discovery of oil.

Gulf Air also announced recently that it would delay the commencement of flights between Bahrain and Juba, South Sudan. However, even with more anticipated growth, Uganda’s airline business continues to witness challenges including; low passenger numbers, yet the list of operators continues to grow, thus threatening to yield into unhealthy competition.

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