Business
Air Uganda suspends operations
Publish Date: Jul 17, 2014
Air Uganda suspends operations
Some of the Air Uganda staff during its launch
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By Samuel Sanya
 
The Aga Khan owned Air Uganda has announced an indefinite suspension of operations. 

 
Air Uganda, the quasi national airline, had their air operators certificate revoked last month by the Uganda Civil Aviation Authority (CAA) that stopped them from making international flights.
 
Air Uganda is the operating name of Meridiana Africa Airlines Limited.

It employed 231 staff who might now have to secure new jobs.
 
The suspension of business followed an audit of the policies and procedures of CAA by the International Civil Aviation Organisation (ICAO) between 11th and June 17th. 
 
Cornwell  Muleya, the Air Uganda Chief Executive Officer says the extended grounding of their three bombardier CRJ 200 fleet has affected lease agreements, the airline had entered into, forcing them into a wall.
 
“Air Uganda has been working with CAA since 17th June to implement revised procedures at the CAA required by ICAO and had expected its AOC (operators’ certificate) to be reinstated in a timely and expeditious manner,
 
“Unfortunately, 31 days have elapsed and recertification is still several weeks away. The result of this prolonged period of grounding has in turn affected key contracts at Air Uganda,” Muleya explained. 
 
“The prolonged inability to generate any revenues has necessitated the airlines board of directors to suspend indefinitely Air Uganda’s operations,” he added.
 
The government has expressed interest in buying shares in Air Uganda while some sections of the public had expressed interest in the establishment of a separate national carrier.
 
Air Uganda was the only operational passenger airline based in Entebbe.

According to the company, they were injecting $15m annually in taxes to the Ugandan exchequer.
 
Muleyi placed blame on CAA for the Airlines woes saying, “It is now apparent that the audit revealed short comings in the CAA’s oversight and regulatory capacities, consequently impacting the CAA’s ability to award air operators certificates.”

According to sources in the tourism industry, the exit of Air Uganda reduces competition for regional routes, and will lead to further hikes in air travel charges.

Ticket prices for Kenya Airways (KQ) have shot up to between $500 and $1,500, more than twice the previous amount, according sources in the tourism industry.

CAA Public Relations Manager, Ignie Igundura was contacted but he was unable to comment at press time.

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