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Uganda Airlines cuts loss by Shs87b 

Notwithstanding the loss, Uganda Airlines registered a growth in revenues and improved operational efficiency in 2024. Photo / Michael Kakumirizi 

What you need to know:

  • The Auditor General indicates that although Uganda Airlines remains a loss-making parastatal, it reduced its loss from Shs324.9b to Shs237.8b in 2024

Uganda National Airlines Company Limited, which operates national carrier, Uganda Airlines, reduced its loss position by 26.5 percent in the 2023/24 financial year, according to a report by the Auditor General.

In details contained in the Auditor General's annual report for the year ended December 31, 2024, Auditor General Edward Akol noted that despite having an operating margin lower than 15 percent, Uganda Airlines had improved by over 18 percent, which puts the company in a better position to meet its operating costs, while remaining profitable, compared to the same period in 2023.

However, the report noted that the national carrier remained among the five state enterprises, which in the period had posted the worst return on assets - below 5 percent – while the ratio of its current assets to current liabilities was below 1.5, meaning that it could have challenges of meeting and paying its short-term financial obligations.

The report indicates that the airline incurred a net loss of Shs237.8b in 2024, which, however, was a 25.6 percent or Shs87.1b reduction from the Shs324.9b loss posted in 2023.

In 2019, government revived Uganda Airlines, which had been in limbo, after it was liquidated in 2000.

However, the airline has since revival registered a streak of losses, which the Auditor General, noted in his report that “sustained losses threaten financial sustainability and shareholder value”.

In June 2021, two years into the launch, Uganda Airlines posted a loss of Shs164.5b, which was an expansion of Shs62.1b from Shs102.4b that the company had posted in the 2019/20 financial year.

The loss would subsequently increase to Shs266b in the period ended June 2022, before growing further by 22 percent to Shs325b in June 2023 “due to a significant increase in direct costs by Shs140.8b.

Government has previously indicated that Uganda Airlines is expected to break even within an operating period of five years.

However, the airline reported an expansion in operating revenue to Shs369.7b, which was a substantial growth of Shs139.3b from the Shs230.4b reported in the same year ended June 2023. 

The Auditor General also reported that the airline had indicated that it was in the process of developing a new 10-year strategy that would ensure financial sustainability, operational efficiency, learning and development, and stakeholder engagement - initiatives geared towards revenue enhancement, and better cost control.

Other audit queries included contingent liabilities of Shs11.9b, relating to pending court cases, slow implementation of assessed projects, and incomplete implementation of Parliamentary recommendations.

The report noted that of the 19 outputs with 53 activities worth Shs456.2b assessed, only five activities worth Shs269.8b were fully implemented, 26 (Shs96.6b) were partially implemented, and 22 (Shs89.8b) were not implemented.

Additionally, the Auditor General noted that an audit of the Treasury Memorandum for the 2020/21 financial year had found that of the 18 Parliamentary recommendations, 12 had been fully implemented, while six were partially implemented, resulting in a compliance rate of 66.7 percent.