Dubai firm threatens legal action against Uganda Airlines over Shs37b fuel debt
Uganda airlines planes at Entebbe Airport recently. PHOTO/ FILE
What you need to know:
- The contractor also warned that in the event that legal action is taken responsibility would rest “solely with Uganda Airlines’ management, as the situation is critical and requires immediate action.”
Dubai-based MixJet Flight Support has given Uganda Airlines a 48-hour ultimatum to pay at least $6 million of the $10 million (about Shs37 billion) the national carrier owes the fuel contractor.
The Airlines had reportedly committed to first pay $2 million as part of the ongoing efforts to address the outstanding debt.
However, the contractor is yet to receive the funds which cover only a quarter of the debt.
“Without an additional payment of $4 million, we will be unable to settle critical dues...,” a source at MixJet said before adding that the delay in payment is affecting their ability to maintain services for their other clients.
This publication understands MixJet wrote to Uganda Airlines Chief Executive Officer, Ms Jenifer Bamuturaki on November 1, 2024 requesting an immediate payment of at least $6 million within 48 hours, failure of which would leave the contractor with no option but to halt all services and “pursue legal avenues to recover the owed balance.”
The contractor also warned that in the event that legal action is taken responsibility would rest “solely with Uganda Airlines’ management, as the situation is critical and requires immediate action.”
Uganda Airlines signed a contract for global fueling with MixJet, which then subcontracts other suppliers on the ground to deliver the service on its behalf.
Although the contract requires that MixJet should receive priority, a source at the Uganda Airlines said management has been making advance payments to other suppliers in four locations.
The said suppliers charge higher rates than those quoted by MixJet, according to our source who argued that the practice not only strains Uganda Airlines cash flow but also suggests a lack of fair treatment “and may constitute a breach of contract by diverting business from MixJet without valid justification.”
This publication contacted Uganda Airlines officials for a comment but our repeated phone calls to the known numbers of the head of corporate affairs, Ms Shakila Rahim Lamar and Ms Bamuturaki, went unanswered by the time of filing this story.
However, another source at the national carrier who’s not authorized to speak to the media said the delayed payment jeopardizes the continuation of Uganda Airlines flights to Dubai and Mumbai for November.
