By Spy Uganda
Kampala: The Auditor Generals’ report on Uganda Airlines for the 2019/20 financial year has been released showing that the airline started its first year of operation with a UShs 102 billion loss.
According to the report, the airline moved from UShs 15 billion loss in the 2018/19 financial year to UShs 102 billion in the 2019/20 financial year.
The losses were attributed to the fact that Uganda Airlines spent roughly US$29.2 million on direct costs and US$3.6 million on indirect costs.
That is to say, the airline was living way beyond its means as it realized a paltry US$ 9.9m from the projected US$92.8 million revenue.
Auditor General John Muwanga underpinned that the deficits amassed put the airline in a precarious position of failing to comfortably service its financial obligations or projected investments in the near future.
The report further adds that Uganda Airlines’ business plan was not annualized, which posed the challenge of achieving certain milestones within given timelines as well as keeping track of progress.
Despite the gloomy start, stakeholders are optimistic that the losses are teething problems that will soon be ironed out, added to the fact that the airline industry is slowly recovering from a year of turmoil.
Founded in 1976 and registered as Uganda National Airlines Limited, the airline was reborn in August 2019 after years of liquidation spanning back to 2001.
Uganda’s lack of a state-owned airline for nearly two decades made it difficult for the country to market itself as a robust tourist destination, as well as attract investors for its fast-rising oil and gas industry.