Ugandan Members of Parliament (MPs) on the Budget Committee have asked government to justify the continuous capitalisation of Uganda Airlines.
- •The demand follows a proposal to increase the airline’s budget in the 2024/2025 financial year.
- •The Government intends to increase the airline’s funding by UShs 34.9 billion, raising the budget to UShs120.9 billion..
- •The increased budget will be used to pay the Uganda Civil Aviation Authority, wages, staff training, procuring aviation fuel, insurance cover for aircraft, Inflight catering, and others
“We need to understand the Government investment in the airline; how many shares does the Government have? How much do they intend to invest in the short term, midterm, and long term, and which funding vehicle,” asked Hon. Dickson Kateshumbwa (NRM, Sheema municipality).
Citing Uganda Airline’s inefficiencies, members said government needed to demonstrate the airline’s likelihood of its breaking even, as its basis for continuous funding.
“When you talk of flying to destinations such as Dubai, anyone can understand. We want to know what informed the airline to open flights to places such as Abuja,” said Hon. Remigio Achia, the Deputy Chairperson of the Budget Committee, who also complained of prolonged delays while using the airline.
The Long Road to Profitability
The current airline is a revival of an older, similarly named, airline that flew from 1977, after the collapse of the jointly operated East African Airways, until 2001. A privately owned airline, Air Uganda, filled the gap from 2007 until its license was revoked in 2014.
The new Uganda Airlines begun flying in 2019 with two aircraft, with its maiden flight being from Entebbe to JKIA in Kenya.
- •It now has a fleet of six aircraft, including two Airbus A330-800s.
- •It has added several destinations since, including to Tanzania Mainland and Zanzibar, Kinshasa, Lagos, and Mumbai.
- •As expected for the capital-intensive phase its in, the airline has not broken even yet, and its loss-making streak includes a $70.6 million loss in 2021/22
According to its CEO, Jenifer Bamuturaki, the airline projects that it will break even around 2027. This is ambitious, as it is still playing catch up with its plans to fly to around 20 routes by 2021, a goal which was shelved due to COVID-19 disruptions.
