November 15, 2007 (KAMPALA) — A new Ugandan airline started flights on Thursday to Tanzania, South Sudan and Kenya’s capital Nairobi — opening up competition on a route long monopolised by Kenya Airways <KQNA.NR> , its commercial director said.

Speaking by telephone from Uganda’s Entebbe airport as the privately owned airline’s first Nairobi return flight touched down, Vittorio Scabbia said it would target executives.

"We are looking at business people. Each aircraft has 12 business class seats and 85 economy ... We expect 60 percent capacity within the first six months," he told Reuters.

The company had bought two Boeing DC9-32 jet planes, which Scabbia said were more than enough to cover its proposed routes.

The airline has scheduled two daily return flights to Nairobi, three flights a week to the South Sudanese capital Juba, and four flights to Dar es Salaam, two of them via Tanzania’s tourist destination Mount Kilimanjaro.

The company will buy Boeing MD-87 aircraft at the end of March, he added, although the number has not yet been decided.

Kenya Airways, which flies from Entebbe to Nairobi four times daily, has enjoyed a monopoly on the route since the demise of the state-owned Uganda Airlines in 2001, after a botched privatisation following years of mismanagement.

Two small airlines, Eagle Air and Dairo Air, already fly from Entebbe to Juba. Air Tanzania and Precision Airlines fly to Dar es Salaam.

Air Uganda is owned by the wealthy Aga Khan’s group of companies. Scabbia said it may list some shares publicly, but not now. "First, we need to perform well."

(Reuters)