Business
Air Uganda suspends operationsPublish Date: Jul 17, 2014
Air Uganda suspends operations
  • mail
  • img
Some of the Air Uganda staff during its launch
newvision

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.

Related Stories

Should the govt revive Uganda Airlines?

Air Uganda cancels flights to JKIA

Air Uganda to start flights to Mogadishu

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Samsung posts 20% fall in net profit
Samsung Electronics reports a near 20 percent decline in second quarter net profit, blaming increased competition from cheap Chinese devices in the key smartphone sector....
West Nile grid extension on schedule
THE West Nile power grid extension from Nyagak Hydro plant to the rest of the districts is moving steadily with over 46% of the work on the sh44 billion project...
Gov’t allocates sh10b for tarmacking roads
GOVERNMENT has earmarked sh10b for the tarmacking of roads intended to enhance commerce, reduce dust and facilitate mobility in 26 town councils...
Local govt asked to participate in alternative energy planning
Ministry of energy officials and experts from GIZ have urged local government leaders to participate in developing affordable and efficient sources of energy at district level to light up districts instead of the long waiting for the central government to do for them what they can do themselves....
Central Bank begins financial literacy campaign in schools
Bank of Uganda has started a campaign to boost people’s understanding of economic issues affecting them so that they can identify opportunities to exploit....
Shipping firm chief accountant charged in MTN $3.8m fraud
The chief finance officer of Three Ways Shipping Company has been charged with embezzling $3.8m (about sh10b), belonging to telecom company MTN....
Should private schools and institutions be given tax exemption?
Yes
No
Can't Say
follow us
subscribe to our news letter