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Uganda Airlines posts 62% growth in income
The Auditor General’s report notes that Uganda Airlines’ losses expanded by 22 percent from Shs265.91b in the period ended June 2022 to Shs325b. Photo / Michael Kakumirizi
What you need to know:
- The Shs230b is, however, at least 46.8 percent lower than the Shs491.8b that Uganda Airlines had projected to earn in the period ended June 2023
Uganda Airlines has reported a 62 percent increase in revenues to Shs230.4b for the year ended June 2023.
The Shs230.4b was a significant growth from the Shs141.7b reported in the same period ended June 2022.
Ms Jenifer Bamuturaki, the Uganda Airlines chief executive officer, told Monitor at the weekend the growth resulted from increased operational efficiency and aggressive marketing.
However, details contained in the Auditor General’s report for the period ended June 2023 indicated that the Shs230.4b was at least 46.8 percent lower than the Shs491.8b Uganda Airlines, which trades as Uganda National Airlines Company Limited, had planned to earn in the period.
The report also noted a 22 percent increase in losses from Shs265.91b in the period ended June 2022 to Shs325b “due to significant increase in direct cost by Shs140.8b, which represented an increase of 39.8 percent.
“The major cost drivers included aviation fuel, crew allowances, crew salaries and pilot training, and depreciation [of the company’s assets],” Auditor General John Muwanga wrote, listing Uganda Airline among 15 public entities with a declining operating margin from the previous year, which makes it difficult for such corporations to pay their operating and debt expenses.
Uganda airline has had difficulty in balancing its income and expenditure curve, with some experts saying they are doubtful whether the company will achieve its plan of turning profitable by 2027 and covering at least 85 percent of its expenses.
Ms Shakila Lamar, the Uganda Airlines head of corporate affairs and public relations, at the weekend said the airline was having a progressive increase in revenues, supported by a strategic marketing plan, which will eventually see it achieve a profitable return.
“Our revenues are increasing even though a profit is yet to come, but the major enablers are the strategic marketing we have done, the good networks in the East Africa and the fact that we have done some cost cutting to reduce expenses,” she said.
The Auditor General also highlighted a number of other challenges, among which included unrealised revenue gains of Shs59b due to regulatory obstacles , which prevented the airline from launching new routes to Mumbai, Lagos, Jeddah, Guangzhou, and London by June 30, 2023.
“[The routes the airlines failed to secure during the 2022/23 financial season] affected [its] targets for passenger numbers, revenue, number of routes, average load factor, average route fare per passenger and total hours of operation per aircraft type among others,” the Auditor General noted. However, details indicate the airline has since secured the Lagos and Mumbai routes and is awaiting on the London one.
The Auditor General also revealed that Uganda Airlines had paid $262,345.64 (about Shs1b) to a fraudulently created bank account that had purportedly created in the names of Civil Aviation Authority of DRC, thus resulting into a loss to the company.
Uganda Airlines declined to comment on the matter.
Previous projections
In the period ended June 2022, Uganda Airlines had projected a revenue target of Shs348.4b but realised Shs141.8b due to an increase in foreign exchange losses and the airline’s inability to transfer some passenger revenues due to restrictions on foreign exchange transfers in specific countries, such as Burundi that denied it transfers of more than Shs4.6b.
