According to the Uganda Auditor General’s report, Uganda Airlines has cut its losses by 26% in the last 12 months, marking an important financial milestone.
The decline in losses from Shs324.9 billion in 2023 to Shs237.85 billion in 2024 is evidence of strong leadership and calculated actions meant to reverse years of financial difficulties.
Uganda Airlines’ head of corporate relations and communication, Shakila Rahim Lamar, stated, “The 26% decrease in losses is a clear indication of the strides we’ve made in addressing operational inefficiencies.”
The airline’s management is hopeful about turning a profit soon, she continued, pointing to planned expansions and ongoing government funding for capital projects as important facilitators.
After almost 20 years in the dust, Uganda Airlines was brought back to life in 2019 with the goal of improving the nation’s aviation sector and connectivity.
The airline experienced severe financial losses in its early years, which were made worse by legacy contracts, high operating costs, and a lack of income streams, despite early optimism.
The airline underwent a sea change in 2022 when Jenifer Bamuturaki was appointed CEO.
In order to solve inefficiencies and boost income generation, Ms. Bamuturaki took a number of daring steps. She was tasked with guiding the company toward sustainability from its severe loss-making and uncertainty about whether it would survive the very competitive aviation industry.
During an interview with editors in February of last year, Ms. Bamutaraki made her commitment clear by calling on reporters to turn their questions into gripping stories and advocating for a fair and equitable partnership between the media and corporations.
“Remember the fueling controversy that occurred in Dar es Salaam a few years ago? When the media exploded with reports that an airplane waiting to refuel on the ground was in risk of crashing, I couldn’t believe it,” she added.
Important Actions Taken
Bamuturaki oversaw Uganda Airlines’ expansion from 11 to 16 routes, which included the inclusion of Mumbai and Lagos.
Although these routes had upfront expenditures, Ms. Lamar told the Nile Post that they greatly increased passenger volume and cargo earnings, setting up the airline for long-term success.
The national carrier credits the growth of this vital route to its capacity to boost income streams and enhance connectivity.
The airline gave cargo services top priority after realizing their potential, which resulted in a remarkable 380% rise in the previous year.
“Over 9,233 tonnes of cargo were transported, establishing cargo operations as a critical revenue stream,” Lamar stated.
The airline also used a wet lease for an Airbus A320 to make the most of its limited resources, which has helped it satisfy demand on busy routes.
Through this arrangement, Uganda Airlines was able to support passenger growth and expand seat capacity without having to deal with the immediate financial burden of purchasing a whole aircraft.
The airline’s strategy has placed a strong emphasis on cost control. To lessen dependency on outside suppliers, Uganda Airlines renegotiated and examined out-of-date contracts, simplified employee pay and benefits, and implemented a self-handling project at Entebbe International Airport.
In order to maximize acquisition and utilization in the face of shifting worldwide fuel prices, fuel management procedures were also upgraded.
Uganda Airlines also boosted local contracting from 10% to 80%, helping the national economy and guaranteeing reliable supply chains.
According to the airline, this move to local suppliers has strengthened Ugandan industries and cut expenses.
Uganda Airlines still faces difficulties in spite of these successes. Mandatory airplane maintenance, high fuel prices, forex exposures, and blocked payments in nations like Nigeria and Burundi continue to be major problems.
While highlighting these challenges, Ms. Lamar reaffirmed that the strategic actions taken have greatly lessened their effects and put the airline on a sustainable course.
Wider Effects and Prospects for the Future
While many state-owned businesses and firms in Uganda are struggling with declining financial performance, others have been facing dire financial results, according to Auditor General Edward Akol’s report for the most recent fiscal year, which was also his first.
Uganda National Oil Company (UNOC), whose losses dropped by as much as 78.4%, from Shs17.5 billion to Shs3.78 billion, joined Uganda Airlines on the progressive podium.
In 2024, Uganda Air Cargo Corporation’s losses decreased from Shs10 billion in 2023 to Shs8.21 billion.
AG Akol said the trend was positive, indicating that operational changes and improved financial monitoring can lead to notable improvements, even though these numbers still reflect large losses.
Uganda Airlines has made significant socio-economic contributions in addition to its financial performance.
With 20 daily flights on 16 destinations, the airline has shortened travel times and improved regional connectivity.
Ninety percent of the onboard consumables are sourced locally, helping local industries, and its operations make up 23.6% of all traffic at Entebbe International Airport.
Uganda Airlines has produced Shs1.2 trillion in income and 560 employment in the last five years. In order to improve its position in the market, the airline intends to buy two midrange freighters and extend its operations to the United Kingdom.
As we enter new areas and streamline our operations, we anticipate further lowering losses in the upcoming fiscal year, Ms. Lamar stated.
The Uganda Airlines example demonstrates how strong leadership and focused tactics can turn even the most trying situations into a road to recovery and expansion.
