Uganda Airlines spent Shs2.3b on salaries of suspended staff

Uganda Airlines spent Shs2.3b to pay salaries and other allowances of suspended bosses between May and November 2021, details show.

In details contained in a report for the period ended June 2021, Auditor General John Muwanga noted that the airline had between May and November 2021 lost more than Shs2.3b due to salaries  and payment of suspended heads of departments and acting allowances for staff that had been appointed to act in their absence.

“Review of the staff files revealed that there were no committee resolutions on the cases and as a result management extended the suspension on [August 20, 2021] for another [three] months,” the report reads in part, noting that since the affected staff had remained on the same terms of contract, staff appointed to act in their positions were receiving extra pay implying double pay for the same position.

“There has been delayed conclusion of suspension cases … as a consequence, [Uganda Airlines] has lost a total of Shs2.319b] in a seven-month period,” the report indicates.

On April 21, 2021, Works Minister Katumba Wamala, acting on the directives from President Museveni suspended seven Uganda Airlines bosses, including chief executive officer Cornwell Muleya over alleged corruption, inflated costs and abuse of office, among others.

The suspension, which later included the entire board, had been scheduled to last three months effective April 29, 2021 but was extended on August 20, 2021 by three months after a review of staff files had revealed that the investigating committee had not yet produced an action report. 

However, on Monday, Works and Transport permanent secretary Waiswa Bageya, said government had last Friday terminated the contract of Uganda Airlines Chief Executive Officer Cornwell Muleya, a decision he said had been reached by the interim board.

It is not clear whether contracts of other staff, who had been suspended including finance director Paul Turacayisenga, commercial director Rogers Wamara, procurement manager Moses Wangalwa, marketing officer Deo Nyanzi, senior administration manager Andrew Tumusiime, ground operational manager Harvey Kalama, safety manager Bruno Oringi, quality manager Michael Kaliisa, crew training manager Juliet Otage Odur and first officers Kenneth Kiyemba and Alex Kakooza, were also terminated.

Yesterday Mr Bageya told Daily Monitor government will further pay some of the terminated staff certain reliefs defined under their contracts. 

For instance, he said, Mr Muleya, a Zambian, is entitled to a repatriation allowance, which, if he applies, will be paid.  “

“Like the CEO has his entitlements [such as] repatriation,” he said, but noted staff, whose contracts had been reinstated will only claim half pay for the first month, adding that they have been getting their full salaries during suspension.

Expanded losses          

During the period ended June 2021, the Auditor General also noted that Uganda Airlines losses had expanded further from Shs102.4b for the year ended June 2020 to Shs164.57b, noting that the airline had thus generated negative return on assets of 12.2 percent for the year ended June 2020 and 13.1 percent for the period ended June 2021, respectively.

The report also indicated that operating margins - costs before considering interest and taxes – had in the two years exceeded company revenues that were grossly below target for the period ended June 2021.

For instance, the report noted, that whereas Uganda Airlines had budgeted to collect revenue of Shs304.6b during the year under review, only Shs48.6b was realised, representing a performance of 16 percent.

Government has previously said, it expects Uganda Airlines to break even in over five years.                                                               However, the airline has suffered disruptions resulting from Covid-19 and poor management, manifested in different reports to President Museveni that allege corruption and improper recruitment of staff who do not meet international standards.