Hilka Birns/CAPE TOWN Michael Wakabi/KAMPALA
East Africa's SA Alliance faces possible shutdown after posting a $50 million operating loss for the year to April. Other options include its sale or restructuring. Alliance is owned by African Joint Air Services - a partnership of Tanzania, Uganda and their flag-carriers, and South African Airways' (SAA) parent Transnet, which may sell its stake.
Bill Meaney, SAA executive vice president, alliance and network strategy, says Alliance shareholders are considering all options, and talking with potential investors. "SA Alliance has been operating at a substantial loss, mostly absorbed by Transnet," he says.
Sources in the Ugandan ministry of finance say Dairo Air Services, a local cargo airline, has been offered Transnet's 40% stake for $5 million. Dairo is also negotiating to take over the 30% stake owned by Uganda, plus liabilities, but wants rights to Uganda Airlines before it commits to the deal.
A dispute about route ownership has dogged Alliance since it launched as Alliance Air in 1995. Uganda Airlines and Air Tanzania were made to surrender several long-haul routes to Alliance, to which they were supposed to provide feed, but the deal did not work and weakened the flag-carriers.
SAA, which recently failed to secure a shareholding in Uganda Airlines, is seeking alternative partners as it moves to establish Dar es Salaam and Entebbe as hubs. It is keen to build on links with Alliance Express Rwanda, which is 49% owned by Alliance.
Source: Flight International
