Uganda National Airlines Company Limited, operating as Uganda Airlines, reduced its financial losses by 26.5% in the 2023/24 financial year, according to the Auditor General’s latest report.
The report, released by Auditor General Edward Akol, highlights that despite operating with a margin below 15%, Uganda Airlines achieved an 18% improvement in operational efficiency. This positions the airline better to manage operating costs while moving closer to profitability compared to the same period in 2023.
However, the Auditor General noted that Uganda Airlines remains among five state enterprises with the lowest return on assets—below 5%. Additionally, its current assets-to-liabilities ratio is under 1.5, signaling potential challenges in meeting short-term financial obligations.
The airline reported a net loss of Shs237.8 billion in 2024, reflecting a 25.6% (Shs87.1 billion) reduction from the Shs324.9 billion loss recorded in 2023.
Revived in 2019 after its liquidation in 2000, Uganda Airlines has faced persistent losses. The Auditor General warned that these sustained losses threaten its financial sustainability and shareholder value. For instance, in June 2021, the airline reported a loss of Shs164.5 billion, an increase from the Shs102.4 billion loss in 2019/20. The losses rose further to Shs266 billion by June 2022 and to Shs325 billion in 2023 due to a significant rise in direct costs, totaling Shs140.8 billion.
Despite these challenges, the airline’s operating revenue expanded to Shs369.7 billion in 2024, a notable growth of Shs139.3 billion from the Shs230.4 billion reported in 2023.
To address financial sustainability, Uganda Airlines is developing a 10-year strategic plan aimed at enhancing revenue, improving cost control, and fostering stakeholder engagement. The strategy will also focus on operational efficiency and staff development.
The Auditor General also raised other concerns, including contingent liabilities of Shs11.9 billion linked to ongoing court cases, delayed project implementation, and incomplete execution of Parliamentary recommendations.
Of the 19 project outputs assessed, covering 53 activities worth Shs456.2 billion, only five activities worth Shs269.8 billion were fully implemented. Meanwhile, 26 activities (Shs96.6 billion) were partially implemented, and 22 activities (Shs89.8 billion) were not implemented.
Additionally, an audit of the Treasury Memorandum for the 2020/21 financial year revealed that 12 of the 18 Parliamentary recommendations were fully implemented, achieving a compliance rate of 66.7%.
