The management of Uganda Airlines is up -in arms to clear the air about allegations of financial impropriety and poor performance while maintaining that for the first two years of the national carrier’s operations it was still in systems preparation and coupled with the Covid-19 pandemic that left aircrafts grounded -the airline did its best to keep afloat .
This follows conflicting public announcements by several government officials about the performance of the national carrier- hardly two years since its revival amid a covid pandemic that led to the closure of international airports and grounded air travel.
Leaders at Uganda Airlines said the company is fully capitalized by government and has no debts on its balance sheet according to a statement they released in the month of March 2021 . But the recent Auditor General reports says otherwise noting that the Airline was operating in losses.
The Auditor General’s report indicates that Uganda Airlines registered a Shs.102b lose for the financial year 2019/20 financial year. The report shows that Uganda Airlines met exorbitant expenses off planned expenditure and actual revenue with at least $ 3.6m wiped out in -indirect costs and another- $29.2m in- direct costs.
However , the company executives have shot back stating that the Auditor General focused on a period when the airline was still in the preliminary stages of setting up commercial operations and spending on non-operational aspects of the business such as acquiring a license and procuring aircrafts amid a devasting novel-global -Covid-19 pandemic that left the international aviation industry in tatters .
Perhaps this is why the Auditor General further stated that Uganda Airlines had registered dismal performance in using its assets to generate income. The company had a score of -16.5 per cent, which was far below the acceptable 5 per cent score.
But the company leadership says that its financial position as of now is at the initial investment stage where the company has been procuring aircrafts, tools and equipment as well as the set-up cost structures for a modern international airline to operate to acceptable standards . They explain that this should be balanced with income once the start-up process is completed and markets are opened following a rampaging covid-19 pandemic.
The company further states that the procurement of its fleet was carried out in a gradual manner to ensure that no mistakes were made along the way and therefore, its performance cannot be measured along those parameters . “ The planes were procured at different intervals, which, coupled with the slow licensing process and securing of travel routes, automatically caused the company not to make any profits -but that in itself doesn’t mean management under performed,” trusted sources explained in rebuttal to accusations of poor performance .
Sources close to the Uganda Airlines management said that it was unfair to send the top management on forced leave after the audit report without hearing their side of the story and putting the “operating environment in context”.
The Airline’s top managers were sent on forced leave for alleged poor financial management and governance problems among others. The alleged poor performance threatened the very survival of the company. But inside sources say that the issues highlighted were tabled by the management that has been suspended as way back in January 2021 but no action was taken .
In a dossier addressed to President Yoweri Museveni the Airline top executive accuses “syndicated mafias” of trying to undermine the operations of the airline for selfish interests and not the bigger national -public good.
The executives accuse the office of the Auditor General for “peddling lies”, influence peddling and allegedly attempting to solicit bribes to issue ‘favorable” audit reports . The Managers also accused sacked Commercial Director ,Jennifer Bamuturaki of continuing to work with those fighting management to cause leadership changes without merit .
Legal experts have warned that unless the matter is handled with fairness where all parties are heard fairly and facts presented , the Airline will be sued for billions in damages and damage its global image hardly two years since its revival . The current CEO has a running contract for another 18 months and aviation experts have praised him for having Uganda airlines –proudly back in the skies.
