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Revived in 2019 to enhance connectivity and boost tourism, Uganda Airlines faced turbulence from the start but is now showing signs of recovery, with optimism replacing initial skepticism.
Uganda Airlines has achieved a significant financial milestone by reducing its losses by 26% over the past year, as highlighted in the Uganda Auditor General’s report.
Losses dropped from Shs324.9 billion in 2023 to Shs237.85 billion in 2024, a testament to effective leadership and strategic initiatives aimed at reversing years of financial challenges.
“The 26% reduction in losses is a clear indication of the strides we’ve made in addressing operational inefficiencies,” said Shakila Rahim Lamar, head of corporate affairs and communication at Uganda Airlines.
She added that the airline’s leadership is optimistic about achieving profitability in the near future, citing planned expansions and continued government support for capital projects as key enablers.
Uganda Airlines was revived in 2019 after nearly two decades in the dust to enhance the country’s connectivity and boost its aviation industry.
Despite initial optimism, the airline grappled with significant financial losses in its early years, exacerbated by legacy contracts, high operational costs, and limited revenue streams.
The appointment of Jenifer Bamuturaki as chief executive in 2022 marked a turning point for the airline.
Tasked with steering the company toward sustainability from is acute loss-making and uncertainty on whether it would survive the cut-throat aviation competition, Ms Bamuturaki implemented a series of bold measures to address inefficiencies and improve revenue generation.
Ms Bamutaraki laid her commitment bare during an engagement with editors in February last year, urging journalists to transform their inquiries into compelling narratives while promoting a balanced relationship between the media and businesses.
“Do you remember the fuelling saga in Dar es Salaam some years ago? I found it hard to believe when the media ran wild with stories suggesting that an aircraft, which was on the ground waiting to refuel, was in danger of crashing,” she said.
Key Measures Implemented
Uganda Airlines, under the stewardship of Bamuturaki, expanded its operations from 11 to 16 routes, including the addition of Mumbai and Lagos.
Ms Lamar told the Nile Post that while these routes incurred initial costs, they significantly boosted passenger traffic and cargo revenues, positioning the airline for long-term growth.
The national carrier attributes this strategic route development to its ability to improve connectivity while increasing revenue streams.
Recognising the potential of cargo services, the airline prioritised this segment, leading to an impressive 380% growth over the past year.
“Over 9,233 tonnes of cargo were transported, establishing cargo operations as a critical revenue stream,” Ms Lamar said.
To maximise limited resources, the airline also utilised a wet lease for an Airbus A320, which has been instrumental in meeting demand on high-traffic routes.
This arrangement allowed Uganda Airlines to increase seat capacity and support passenger growth without the immediate financial burden of outright aircraft acquisition.
Cost management has been a focal point of the airline’s strategy. Uganda Airlines reviewed and renegotiated outdated contracts, streamlined staff wages and benefits, and introduced a self-handling project at Entebbe International Airport to reduce reliance on external providers.
Fuel management mechanisms were also improved to optimize acquisition and usage amidst fluctuating global fuel prices.
Additionally, Uganda Airlines increased local contracting from 10% to 80%, ensuring consistent supply chains while supporting the national economy.
This shift to local suppliers has reduced costs and bolstered Ugandan industries, the airline noted.
Despite these achievements, Uganda Airlines continues to face challenges. Forex exposures, high fuel costs, blocked funds in countries like Nigeria and Burundi, and mandatory aircraft maintenance remain pressing issues.
Ms Lamar highlighted these obstacles but reiterated that the strategic measures adopted have significantly mitigated their impact, setting the airline on a path toward sustainability.
Broader Impact and Future Prospects
In his report for the last financial year – and a maiden one at that – Auditor General Edward Akol, noted that while a number of state-owned enterprises and corporations in Uganda are grappling with worsening financial performance, some have been facing bleak financial outcomes.
Joining Uganda Airlines on the progressive podium were Uganda National Oil Company (UNOC), whose losses sharply reduced by up to 78.4%, from Shs17.5 billion to Shs3.78 billion.
Uganda Air Cargo Corporation also showed progress, reducing its losses from Shs10 billion in 2023 to Shs8.21 billion in 2024.
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While these figures still represent substantial losses, AG Akol said the trend was encouraging, suggesting that operational adjustments and better financial oversight can result in significant improvements.
Beyond financial performance, Uganda Airlines has made substantial socio-economic contributions.
Operating 20 daily flights across 16 routes, the airline has enhanced regional connectivity and reduced travel times.
Its operations account for 23.6% of Entebbe International Airport’s total traffic, while 90% of onboard consumables are sourced locally, supporting local industries.
Over the past five years, Uganda Airlines has generated Shs1.2 trillion in revenue and created 560 jobs. Looking ahead, the airline plans to expand its operations to the United Kingdom and acquire two midrange freighters, further strengthening its market position.
“We are optimistic about reducing losses further in the next financial year as we expand into new markets and optimise our operations,” said Ms Lamar.
The story of Uganda Airlines highlights how effective leadership and targeted strategies can transform even the most challenging circumstances into a path toward recovery and growth.
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