Uganda Airlines officials came under pressure from MPs over persistent losses, rising debt and financial irregularities flagged in the Auditor General’s 2025 report.
The airline’s officials Thursday appeared before the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase), chaired by Kyadondo East MP Muwada Nkunyingi, to respond to queries in the audit report.
According to the report, Uganda Airlines recorded a loss of Shs230.816 billion in the 2024/25 financial year, following losses of Shs231.584 billion in 2023/24 and Shs323.598 billion in 2023.
The Auditor General also reported that the airline’s debt ratio increased from 20.86 percent to 29.92 percent, while accumulated arrears rose by Shs64.012 billion to Shs235.70 billion.
The airline’s operating margin stood at 46.66 percent, while its return on assets was negative 24.49 percent and its current ratio was 0.71, indicating continued financial and liquidity pressure.
MPs also questioned why only Shs200 million had been recognised as the airline’s investment from the Shs1.984 trillion injected by government.
The audit further flagged the lack of timely closure and reconciliation of an A320 wet-lease agreement, an unclassified performance deposit, unbanked cash collections at the airline’s Juba office and unsupported penalties involving aviation fuel suppliers.
It also found that the airline procured aviation fuel from suppliers without contracts and had not adequately planned for the disposal of assets.
MPs raised additional concern over alleged duplication of air tickets, with claims that the same ticket serial number could be issued to different passengers.
Kalungu West MP Joseph Ssewungu asked management to explain how such irregularities could occur and what controls had been introduced to prevent revenue losses.
Committee chairperson Mr Nkunyingi also questioned the airline’s dependence on passenger revenue.
‘How do you safeguard these revenues if it is from, because if 87 percent is from passenger, and we have now a revelation that at one point is at risk?’ he asked.
Uganda Airlines Chief Finance Officer Allan Joel Kyeyune attributed the losses to the impact of Covid-19, the cost of opening new routes and limited revenue streams.
He said the airline had planned to launch routes to Cape Town, Accra, Jeddah and Asmara but was unable to open them as scheduled, affecting projected revenues.
Mr Kyeyune said newly launched airline routes generally take four to five years to mature and become sustainably profitable, while Uganda Airlines continues to incur costs as it expands its network.
He said passenger revenue accounts for 87 percent of the airline’s income, cargo 11 percent, with the remainder coming from sources such as charters and excess baggage.
‘There is no airline in the world that will be profitable relying on only two revenue streams majorly, which is passenger and cargo,’ he said.
On unbanked cash collections, Mr Kyeyune acknowledged that the issue had been identified during the audit but said the airline had since worked with Ecobank to install systems allowing customers to make payments directly to the bank and receive receipts.
He said the airline was also increasingly using electronic payment platforms as it expands its international operations.
Uganda Airlines Chief Executive Officer Girma Wake told MPs that management was working on a recovery and expansion strategy, although he cautioned that profitability would not be achieved immediately.
He said the strategy includes restoring grounded aircraft, strengthening regional connectivity and positioning Entebbe as an aviation hub.
Mr Wake said the airline has ordered four Boeing 737 MAX aircraft and four Boeing 787-9 aircraft, with deliveries expected from 2032 and 2033 respectively.
He added that Uganda Airlines plans to dry-lease smaller aircraft to expand regional operations and open additional routes, including Accra and Rwanda, to feed passengers into its long-haul network.
The airline was established as part of government’s efforts to rebuild Uganda’s national carrier and strengthen Entebbe’s position as a regional aviation hub.