Ugandan MPs Question Increased Investment in Uganda Airlines

Summary

• Ugandan MPs on the Budget Committee are questioning the government’s increased funding proposal for Uganda Airlines in the 2024/2025 budget.

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Members of the Budget Committee in Uganda’s Parliament are calling on the government to provide a rationale for the ongoing financial support to Uganda Airlines. This request comes in response to a proposal to increase the airline’s budget for the 2024/2025 fiscal year, with the government planning to boost funding by UShs 34.9 billion, resulting in a total budget of UShs 120.9 billion.

The additional budget allocation is intended for various purposes, including payments to the Uganda Civil Aviation Authority, employee salaries, staff training, procurement of aviation fuel, insurance coverage for aircraft, inflight catering, and other related expenses.

In seeking clarification, Hon. Dickson Kateshumbwa (NRM, Sheema municipality) posed questions about the government’s investment in the airline, such as the number of shares owned, the short-term, midterm, and long-term investment plans, and the funding mechanisms involved.

Members of the committee expressed concerns about Uganda Airlines’ operational inefficiencies and urged the government to demonstrate the airline’s potential for achieving profitability, considering the continuous financial support it receives. Hon. Remigio Achia, Deputy Chairperson of the Budget Committee, questioned the rationale behind the airline’s choice of destinations, citing examples like Abuja, and voiced complaints about extended delays experienced by passengers.

The current Uganda Airlines, established in 2019 with two aircraft, has expanded its fleet to six, including two Airbus A330-800s, and added several destinations. Despite these efforts, the airline has not yet reached a break-even point and reported a loss of $70.6 million in the 2021/22 fiscal year. According to CEO Jenifer Bamuturaki, the airline projects a break-even around 2027, facing challenges in achieving its initial goal of serving 20 routes by 2021 due to disruptions caused by the COVID-19 pandemic.

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