Until 1977, Kenya, Tanzania and Uganda were served by a single airline - East African Airways (EAAC) - which was jointly owned by the three governments. With origins that predated the Second World War, EAAC was a successful airline in its heyday of the 1960s, with a major domestic network and international services extending across the globe to Asia and the USA.
By the 1970s, political change combined with increased competition from European airlines conspired to ensure the airline's demise.
An embryonic Kenya Airways emerged from the collapse as the major international airline in the region - a situation that remains today. Within East Africa, especially in Tanzania, the general feeling is that Kenya benefited most from that collapse.
Since Kenya Airways was privatised in 1996, with KLM taking a minority stake, It has watched as its former bedfellows grappled with the question of long-haul operations. While Tanzania and Uganda had flag carriers, the two countries adopted a joint venture with South African Airways (SAA) to pursue their long-haul ambitions - SA Alliance Air. However, this airline folded in October 2000, citing its "inadequate international route structure" and losses of about $50 million.
Two years ago, SAA planned to bid for a stake in Uganda Airlines, but encountered hostile legislative issues and switched its attention to Air Tanzania. Its withdrawal led to the collapse of Uganda Airlines in May 2001.
One of the principal reasons for the failures of Uganda Airlines and SA Alliance Air was that they had limited route networks that were not integrated. Uganda Airlines' services were limited to a few frequencies around East, South Africa and Dubai in the Middle East, with no long-haul network.
SA Alliance Air had the intercontinental routes, but the regional services remained the preserve of fiercely protective national carriers. Merging the two would have been the most viable proposition, but a combination of nationalistic pride and failure to find an equitable formula for sharing the gains and losses scuttled the idea.
Meanwhile, last year a Kenya Airways proposal to take over Air Tanzania was rejected by the government, which instead accepted SAA's $10 million bid for a 49% stake in October. The tie-up will see Air Tanzania's fleet renewed and its network expanded. Kenya Airways has responded by taking a stake in Tanzanian carrier Precisionair, and is calling for the region to go full circle and return to a joint airline philosophy along the lines of EAAC.
Source: Flight International
