Uganda Airlines has reported a substantial 62% increase in revenues, reaching Shs230.4 billion for the year ending June 2023. This growth, compared to Shs141.7 billion in the corresponding period of 2022, is attributed to enhanced operational efficiency and aggressive marketing efforts, according to Ms. Jenifer Bamuturaki, the CEO of Uganda Airlines.
However, the Auditor General’s report for the same period highlighted that the achieved revenue was at least 46.8% lower than the Shs491.8 billion initially projected by Uganda Airlines for the specified timeframe. The report also noted a 22% increase in losses, rising from Shs265.91 billion in June 2022 to Shs325 billion.
The increase in losses is attributed to a significant rise in direct costs, specifically in aviation fuel, crew allowances, crew salaries, pilot training, and depreciation of the company’s assets. Auditor General John Muwanga listed Uganda Airlines among 15 public entities facing challenges in meeting operating and debt expenses due to a declining operating margin.
Uganda Airlines faces difficulties in achieving a balance between income and expenditure, with skepticism from experts about meeting the target of turning profitable by 2027 and covering 85% of its expenses. Shakila Lamar, the head of corporate affairs and public relations at Uganda Airlines, mentioned that the airline is progressively increasing revenues through strategic marketing and cost-cutting measures.
The Auditor General’s report also highlighted challenges, including unrealized revenue gains of Shs59 billion due to regulatory obstacles that hindered the airline from launching new routes to Mumbai, Lagos, Jeddah, Guangzhou, and London by June 30, 2023. However, the airline has reportedly secured the Lagos and Mumbai routes and is awaiting confirmation for the London route.
Additionally, the report revealed that Uganda Airlines paid $262,345.64 (about Shs1 billion) to a fraudulently created bank account purportedly in the name of the Civil Aviation Authority of the Democratic Republic of Congo, resulting in a loss for the company.
Despite these challenges, Uganda Airlines remains optimistic about its future profitability, citing strategic marketing efforts, a strong East African network, and cost-cutting measures as key enablers for future success.
