An interline agreement is a relationship between airlines which allows one airline to sell services to a customer, ordinarily provided by another airline. Airlines use these agreements to sell routes that they would otherwise not be able to serve alone.
According to Jenifer Bamuturaki, Uganda Airlines acting chief executive officer, the carrier expects to sign these agreements with Emirates, Qatar and KLM airlines.
“These agreements will be important as we start long-haul flights because they improve passenger confidence in us. We shall also be earning commissions from them,” Bamuturaki said as she was speaking to a section of Rotarians over the airline’s journey last week.
The national carrier is expected to launch direct inter-continental flights to Europe, the Middle East and Asia with targeted destination cities of London, Dubai, Mumbai and Guangzhou With the agreements in place, she said, passengers will be able to access Uganda Airlines services on the system from anywhere in the world.
She said the agreements with Qatar, KLM and Uganda Airlines will allow them to sell each other’s routes. On the other hand, Emirates will only sell Uganda Airlines and not vice versa.
Already, the carrier recently signed an agreement with Hahn Air and APG Airlines, allowing the two to be used as plating carriers in markets where Uganda Airlines does not have reach.
This means that the two airlines issue tickets on behalf of Uganda Airlines.
“We are also in the process of signing the Multilateral interline Traffic Agreement (MITA) to enable Uganda Airlines sell on any airline who is a member and vice versa,” she added.
This will give Uganda Airlines access to over 350 participating worldwide domestic and international airlines that are MITA signatories.
The agreements will also enable Uganda to have a wider reach in attracting tourists, one of the biggest forex earners for the country.
It will also give more visibility of Ugandan products in the wider markets, such as Europe, the far East, the United States and Australia.
Championing open skies
Meanwhile, the East Africa Business Council (EABC) is calling on regional states to adopt the open skies policy to improve the consolidation of EAC exports to overseas markets.
They said this would greatly aid the recovery of the tourism, hospitality and transport sectors that have been highly impacted by the COVID-19 pandemic.
According to the EABC chief executive officer, John Bosco Kalisa, the regional states have lost upwards of $4b (sh14.2trillion) of international tourism receipts over the last 12 months.
Kalisa said liberalisation of the airspace (open skies) would lower the airfare by approximately 9% and stimulate passenger demand by more than 14%.
In 2015, the African Civil Aviation Commission and IATA commissioned a study on the benefits of full air transport liberalisation among East African Community partner states.
The result indicated the move would add $202m to the regional GDP per annum, increase traffic by 46%, reduce fares by 9% and increase frequency by 41%.
Kalisa said presently, flying in the region is considered a massive undertaking, due to the high ticket costs, compared to further destinations like Dubai.
“This is why the board has directed us to champion the open skies because it will mark the end of the high airfares in the region,” he said.
East African countries are among the 44 African states that committed themselves to liberalising the aviation industry, curb air taxes and offer qualifying airlines entry rights in order to reduce ticket prices, increase traffic and improve safety.
But almost 20 years later, many African countries including those in the EAC are yet to open their air space, and instead rely on Bilateral Air Services Agreements (BASAs) with the view to shield their local carriers, denying passengers of low airfares.
IATA on the agreements
The IATA interline framework has been a cornerstone of the airline industry for almost as long as the industry has been operating.
Today’s interline framework creates challenges for airlines to maintain commercial control.
In many interline itineraries, there is limited transparency for customers, and limited support for ancillary services, leaving customers with fewer choices on interline itineraries.
According to Jenifer Bamuturaki, the Uganda Airlines acting chief executive officer, the complexity of today’s interline environment limits the involvement of many players, such as low-cost carriers, and surface transport operators. The IATA interline framework is a one-size-fits-all model.
“Airlines often now negotiate and manage many separate agreements that complement or replace a traditional interline agreement,” she said.
Interline models are also emerging in markets that provide alternatives to traditional IATA interlining.
