Uganda National Airlines Company Limited, the operator of Uganda Airlines, reduced its financial losses by 26.5% during the 2023/24 fiscal year, according to the Auditor General’s annual report for the period ending December 31, 2024.
Auditor General Edward Akol highlighted that despite an operating margin of less than 15%, Uganda Airlines made improvements of over 18%, putting the company in a stronger position to cover its operating expenses while remaining profitable compared to 2023.
However, the report pointed out that Uganda Airlines continued to rank among the bottom five state-owned enterprises in terms of return on assets, with a return of less than 5%. Additionally, the airline’s current asset-to-liability ratio remained below 1.5, indicating potential challenges in meeting short-term financial obligations.
The airline posted a net loss of Shs237.8 billion for 2024, a 25.6% reduction from the Shs324.9 billion loss reported in 2023.
Since its revival in 2019, after being liquidated in 2000, Uganda Airlines has continued to experience losses, a trend the Auditor General notes as a threat to the airline’s financial sustainability and shareholder value.
In June 2021, two years after its relaunch, Uganda Airlines recorded a loss of Shs164.5 billion, up from Shs102.4 billion in 2019/20. This loss further increased to Shs266 billion in June 2022, and reached Shs325 billion by June 2023, primarily due to a sharp rise in direct costs by Shs140.8 billion.
The government had projected that Uganda Airlines would break even within five years of its revival.
On a positive note, the airline reported a significant increase in operating revenue, rising to Shs369.7 billion, an impressive growth of Shs139.3 billion compared to the Shs230.4 billion from the previous year.
Additionally, the Auditor General noted that Uganda Airlines is in the process of developing a new 10-year strategy aimed at ensuring long-term financial sustainability, operational efficiency, enhanced revenue generation, improved cost control, and stakeholder engagement.
Other audit findings included contingent liabilities of Shs11.9 billion related to ongoing court cases, slow project implementation, and incomplete Parliamentary recommendations. Of the 19 outputs assessed, only five were fully implemented, while 26 were partially completed, and 22 were not implemented.
The Auditor General also reported that out of 18 Parliamentary recommendations from the 2020/21 financial year, 12 were fully implemented, while six were only partially implemented, resulting in a 66.7% compliance rate.
