Uganda Airlines’ financial struggles continue, with reported losses of 237 billion shillings in 2024. This isn’t the first time the airline has faced significant losses, having reported 104 billion shillings in FY 2020/21, 164 billion in FY 2021/22, and 234 billion in FY 2022/23.
CEO Jenifer Bamuturaki attributes these losses to unavoidable variables and administrative costs. To address these challenges, the airline has implemented strategic initiatives, such as personnel training, process automation, and adjustments to airplane seat configurations.
Despite these efforts, Uganda Airlines still faces significant financial hurdles. However, Bamuturaki remains optimistic, outlining plans to break even within the next three to five years. The airline has seen growth in passenger numbers, with a 75% increase in its fiscal year ending June 2023 compared to the previous year
Uganda National Airlines Company Limited (UNACL) is facing significant financial and operational challenges, according to the Auditor General’s report for the financial year ending 2024. The airline reported a staggering net loss of Shs 237 billion in 2024, which, although a 25.6% improvement from the previous year’s loss of Shs 324.940 million, still raises concerns about its sustainability and shareholder value.
This isn’t the first time UNACL has faced financial struggles. The airline has reported consecutive losses of 104 billion Shillings in FY 2020/21, 164 billion Shillings in FY 2021/22, and 234 billion Shillings in FY 2022/23, totaling 502 billion Shillings.
CEO Jenifer Bamuturaki attributes these losses to unavoidable variables and administrative costs. To address these challenges, the airline has implemented strategic initiatives, such as personnel training, process automation, and adjustments to airplane seat configurations.
Despite these efforts, UNACL still faces significant financial hurdles. However, Bamuturaki remains optimistic, outlining plans to break even within the next three years. The airline has seen growth in passenger numbers, with a 75% increase in its fiscal year ending June 2023 compared to the previous year.
Uganda Airlines’ financial health remains a concern, despite positive remarks from industry experts like Abderahmane Berthé, General Secretary of the African Airlines Association (AFRAA). Berthé commended the airline’s growth in acquiring new flight routes since its revival in 2019.
Although the airline’s losses have decreased, it still faces significant financial challenges. The Auditor General’s report revealed that Uganda Airlines made losses of over half a trillion shillings over the last two years. Specifically, the airline reported losses of 104 billion shillings in FY 2020/21, 164 billion shillings in FY 2021/22, and 234 billion shillings in FY 2022/23, totaling 502 billion shillings .
CEO Jenifer Bamuturaki attributes these losses to unavoidable variables and administrative costs. To address these challenges, the airline has implemented strategic initiatives, such as personnel training, process automation, and adjustments to airplane seat configurations.
Despite these efforts, Auditor General Edward Akol warned that “sustained losses threaten financial sustainability and shareholder value.” Bamuturaki remains optimistic, outlining plans to break even within the next three years
Uganda Airlines Management has acknowledged the financial challenges facing the airline, but remains committed to turning things around. In a response to the Auditor General’s report, the management stated that they are developing a new ten-year strategy focused on financial sustainability, operational efficiency, learning and development, and stakeholder engagement.
The airline has identified initiatives aimed at enhancing revenue and improving cost control. However, despite these efforts, Uganda Airlines has been listed among the worst-performing government entities, alongside:
1. Kilembe Mines Limited
2. NEC Farm Katonga Limited
3. Uganda Air Cargo Corporation
4. Uganda Railways Corporation
This listing raises concerns about the airline’s ability to achieve financial sustainability and operational efficiency. The Auditor General’s report highlighted the airline’s significant losses, totaling over half a trillion shillings over the last two years.
It remains to be seen whether Uganda Airlines’ new strategy will yield positive results and help the airline recover from its financial struggles.
Uganda National Airlines Company Limited (UNACL) is facing significant financial risks due to contingent liabilities and contractual obligations. The company has disclosed contingent liabilities totaling Shs 11.94 billion (USD 3.15 million), primarily related to pending court cases. These liabilities pose a substantial risk to UNACL’s financial resources, as they may result in additional legal costs.
Furthermore, contracts with General Sales Agents (GSAs) have raised concerns about UNACL’s financial exposure. The GSAs were awarded contracts without advance payment guarantees, leaving an outstanding balance of USD 158,876 (Shs 588.79 million). This lack of guarantees puts UNACL at risk of not recovering the owed amount.
Additionally, some GSAs continued to transact with UNACL after their contracts expired, resulting in USD 378,143.34 (Shs 1.43 billion) in sales. However, 22.1% of this amount, equivalent to USD 708,692 (Shs 2.68 billion), remains unpaid as of June 30, 2024. This situation highlights the need for UNACL to strengthen its contract management and revenue collection processes to minimize financial risks.
Project Delays
Uganda National Airlines Company Limited (UNACL) faces significant challenges, including execution delays, non-compliance with procurement regulations, and under performance of strategic objectives. The Auditor General’s report highlights systemic inefficiencies, legal risks, and operational shortcomings.
Key findings include:
- Contracts worth Shs 7.42 billion faced significant delays, and Shs 4.075 billion worth of contracts lacked performance appraisals and progress reports.
2. Strategic objectives, such as marketing, route network expansion, and customer engagement, underperformed in 2024.
3. The company utilized 91.3% of its Shs 593.84 billion budget, leaving a shortfall of Shs 51.64 billion.
4. Only five out of 53 planned activities were fully implemented, while 26 were partially executed, and 22 were not implemented at all.
A forensic audit into cabin crew training costs revealed mixed results, with initial training failing to meet regulatory standards. However, subsequent phases addressed compliance issues and received approval from the Uganda Civil Aviation Authority (UCAA).
The report emphasizes the need for immediate reforms to address financial inefficiencies, legal risks, and operational shortcomings. Stakeholders are calling for enhanced accountability, improved contract management, and strategic investments to ensure the airline’s sustainability. With mounting challenges, the road to profitability for UNACL remains steep, requiring bold leadership and a commitment to operational excellenc
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