Since its revival in 2019, Uganda Airlines has been on a challenging yet inspiring journey to establish itself as a key player in the region’s aviation industry. Despite a rocky start and significant financial struggles, the airline has recently shown remarkable signs of recovery. The latest Uganda Auditor General’s report highlights a significant achievement: Uganda Airlines reduced its losses by 26% over the past year. From a loss of Shs324.9 billion in 2023, the airline’s losses shrank to Shs237.85 billion in 2024, a testament to the company’s renewed efforts and strategic direction.
Uganda Airlines’ resurrection came with high hopes for improving the country’s connectivity and boosting its tourism sector. However, its early years were marred by inefficiencies, legacy contracts, high operational costs, and limited revenue sources. The airline struggled to find its footing in an industry known for razor-thin margins and intense competition. Yet, it became clear that for Uganda Airlines to succeed, it would need visionary leadership and bold strategic shifts.
A key turning point for Uganda Airlines came in 2022 with the appointment of Jenifer Bamuturaki as the CEO. Faced with the daunting task of turning around a loss-making enterprise, Ms. Bamuturaki embarked on a series of crucial reforms aimed at improving both the airline’s operations and financial health. In a candid conversation with the press in February of the same year, she underscored her commitment to navigating the airline through turbulent waters, prioritizing sustainability, and promoting a balanced relationship with the media and businesses alike.
Ms. Bamuturaki implemented measures to address long-standing inefficiencies, including renegotiating contracts, streamlining staffing costs, and introducing a local handling project at Entebbe International Airport to reduce reliance on external service providers. These changes laid the groundwork for the airline’s recovery.
One of the most significant steps toward improving Uganda Airlines’ financial outlook was the expansion of its routes. The airline increased its destinations from 11 to 16, adding vital markets such as Mumbai and Lagos. Although these routes required initial investments, they quickly began to yield results in the form of increased passenger traffic and cargo revenues, positioning the airline for long-term success.
Cargo services, in particular, became a standout revenue stream, growing by an impressive 380% over the past year. Uganda Airlines transported over 9,233 tonnes of cargo, showcasing the untapped potential of this sector. By focusing on this segment, Uganda Airlines not only improved its financial performance but also contributed to the development of regional trade and economic activity.
In addition, the airline took advantage of a wet lease arrangement for an Airbus A320, allowing it to boost capacity on high-demand routes without the immediate financial burden of purchasing a new aircraft. This strategic move played a pivotal role in meeting demand and supporting the airline’s growth while minimizing capital expenditure.
Despite these strides, Uganda Airlines still faces several challenges. Issues such as foreign exchange exposure, high fuel costs, and blocked funds in countries like Nigeria and Burundi continue to pose risks. Moreover, regular aircraft maintenance remains an ongoing expense. However, the airline’s leadership remains confident that its strategic initiatives will continue to mitigate these challenges and lay the foundation for a sustainable future.
Uganda Airlines’ positive trajectory isn’t solely measured by its financial improvements. The airline has become a critical player in Uganda’s socio-economic development. Operating 20 daily flights across 16 routes, Uganda Airlines has not only enhanced regional connectivity but also reduced travel times for business and leisure travelers. It now accounts for 23.6% of Entebbe International Airport’s total traffic, a significant contribution to the airport’s overall performance.
Additionally, the airline sources 90% of its onboard consumables locally, providing a much-needed boost to Ugandan industries. Over the past five years, Uganda Airlines has generated Shs1.2 trillion in revenue and created 560 jobs, underscoring its importance in both the aviation and broader economic landscape.
As Uganda Airlines continues its recovery journey, there are promising signs for the future. The airline is eyeing new markets, including the United Kingdom, and plans to acquire two midrange freighters to strengthen its cargo operations. These moves reflect an optimism that the airline can further reduce losses in the coming year.
“We are optimistic about reducing losses further in the next financial year as we expand into new markets and optimize our operations,” said Shakila Rahim Lamar, the airline’s head of corporate affairs and communications.
The story of Uganda Airlines’ 26% reduction in losses exemplifies how focused leadership and strategic decision-making can turn even the most challenging financial situations into a path toward recovery and growth. While the airline has a long way to go before it reaches full profitability, the progress made so far provides hope that Uganda Airlines is well on its way to becoming a sustainable and competitive force in the aviation industry.
