UGANDA AIRLINES: WHEN WILL PRUDENCE REPLACE HOPE?

Madness, Albert Einstein is often quoted as saying, is doing the same thing over and over again and expecting a different outcome. If that definition holds, then the saga of Uganda Airlines increasingly looks less like a calculated national investment and more like an expensive exercise in institutional denial.

The announcement that the board is advertising for a new chief executive nearly four years after Jennifer Bamuturaki took the reins should therefore come as no shock. It is not a rupture; it is a rhythm. A familiar cycle in which leadership changes are treated as solutions, while the underlying economics of the business remain largely unexamined. Fortunes decline, pressure mounts, a probe is launched, and the organisation responds by changing faces at the top — hoping, once again, for a different result.

The timing of Ms Bamuturaki’s exit is telling. It comes barely weeks after investigators from the Criminal Investigations Directorate, working jointly with the State House Anti-Corruption Unit

, demanded a trove of financial, procurement, and contractual records. These include board-approved business plans, aircraft acquisition documents, and detailed accounts relating to the airline’s most ambitious and capital-intensive venture: the London route. When law-enforcement interest begins to orbit an enterprise so closely, it is rarely about a single individual. It is usually about systems...

The Original Sin: Optimism as Policy

To understand how Uganda Airlines arrived at this juncture, one must return to its revival in 2019. The relaunch was framed as a bold statement of national intent — restoring pride, boosting tourism, and reclaiming airspace surrendered to foreign carriers. 

But beneath the symbolism lay a set of assumptions that Shillings & Cents questioned early on and repeatedly thereafter: unrealistic timelines to profitability, underestimation of operating costs, and overconfidence in the ability of a start-up airline to muscle into fiercely competitive routes...

Aviation is not forgiving. Even globally established airlines with scale, alliances, and deep capital buffers struggle to post consistent profits. New entrants bleed first and ask questions later. Yet Uganda Airlines’ original business plans spoke confidently of early break-even points, as though this were a manufacturing plant rather than a high-risk, low-margin service business. Optimism was not merely cultural; it was embedded as policy.

Follow the Money, Not the Rhetoric

Since revival, government has poured close to Shs1 trillion into the airline through direct capitalisation, guarantees, and supplementary budget allocations. As recently as December, Shs696.5 billion was channelled through the Ministry of Works to bolster fleet acquisition as part of a wider Shs1.6 trillion supplementary request. Officials insist this is a long-term investment in connectivity and trade. In theory, that argument holds water. In practice, it requires discipline.

The numbers tell a sobering story. According to the latest Auditor General’s report, Uganda Airlines reduced its net loss marginally from Shs231.58 billion to Shs230.81 billion year-on-year — an improvement of just 0.33 percent. This narrowing was driven largely by a 19.2 percent increase in revenue, itself a function of route expansion and increased capacity. Progress, yes — but of a fragile kind. When losses still run into hundreds of billions, celebrating incremental improvements risks confusing direction with destination.

Governance Matters — Especially in Aviation

Financial strain alone does not doom an airline. Poor governance does.

In August 2022, Parliament’s Committee on Commissions Statutory and State Enterprises revealed that the CEO did not meet the formal qualifications specified in the job description, notably lacking postgraduate training in administration. The defence offered was that experience compensated for academic requirements. Perhaps. But this episode mattered not because of degrees, but because it signalled a broader disregard for process in a business where process is everything.

Airlines live or die on systems — safety protocols, procurement discipline, route analytics, cost control, and compliance. When governance standards are treated as negotiable, risk multiplies quietly until it erupts loudly, often through losses, audits, or investigations. The current scrutiny by CID and SHACU should therefore be read not as an isolated event, but as a symptom of deeper institutional fragility.

Expansion Is Not the Sin — Unexamined Assumptions Are

It is important to state this clearly: an airline does not need to be profitable before expanding its network. That would be an impossible standard in an industry where even the best operators invest ahead of returns. Expansion can, under the right conditions, be part of the path toward sustainability.

The problem with Uganda Airlines is not expansion itself, but the quality and opacity, of the assumptions used to justify that expansion.

Every route is a bet. A bet on passenger volumes, yields, cargo uplift, and the airline’s ability to attract and retain traffic in the face of formidable competition. Those bets must be grounded in rigorous market data and honest stress-testing. Without that discipline, expansion becomes faith-based economics...

Consider the London route. This is not just another destination; it is the airline’s flagship statement. London is a mature, brutally competitive market dominated by carriers with deep networks, strong brands, and aggressive pricing strategies. Success on this route depends on sustained marketing, corporate travel contracts, diaspora loyalty translated into repeat business, and seamless connectivity.

If an airline struggles to consistently market and fill its London flights, no amount of optimism will magically make the Riyadh route profitable.

This is not cynicism; it is arithmetic. Routes do not become viable because they are announced at press conferences. They become viable because demand exists at the right price and because the airline can capture that demand efficiently. If the most obvious, diaspora-rich route is underperforming, prudence demands a pause — not a sprint into additional long-haul destinations on the assumption that “the next one will work”.

What assumptions underpin Riyadh, Muscat, Accra, or Gwangju? Are we betting on labour traffic, religious travel, cargo contracts, or transit passengers? And are these flows backed by firm data and commercial agreements, or inferred from hopeful correlations? In aviation, scale can lower unit costs — but it can also magnify losses if demand projections disappoint.

The Expansion Trap

Uganda Airlines’ repeated announcements of new aircraft and new routes create the appearance of momentum. But motion is not the same as progress. Adding aircraft increases fixed costs immediately — crew, maintenance, insurance, fuel, and ground handling,  while revenues take time to materialise, if they do at all. Without disciplined sequencing, expansion simply widens the loss profile.

This is where the airline risks falling into a familiar trap: mistaking growth for success. Expanding before optimising existing routes is like building additional lanes on a road whose traffic patterns are poorly understood. More asphalt does not fix congestion if the bottleneck lies elsewhere.

The Hidden Cost: Opportunity Lost

Every shilling invested in Uganda Airlines carries an opportunity cost. Public capital is finite. Close to Shs1 trillion sunk into aviation could have funded agricultural productivity, vocational skills, SME finance, or export-oriented manufacturing, sectors that employ far more Ugandans per shilling spent.

Tourism, often cited as the airline’s justification, does not depend solely on owning aircraft. Tourists arrive because destinations are competitive, safe, affordable, and well-marketed. There are cheaper and often more effective ways to improve connectivity: code-sharing agreements, route incentives for foreign carriers, and rationalisation of aviation taxes that make Entebbe more attractive as a hub.

So What Must Change?

Advertising for a new CEO is the easy part. The harder task is structural reform.

Uganda Airlines needs a brutally honest reset: transparent route-level economics, publicly articulated performance benchmarks, and a governance framework insulated from political interference. Expansion should remain an option but only when justified by clear data and sequenced prudently. Above all, expectations must be recalibrated. Losses are not temporary irritants to be explained away; they are signals to be interrogated.

Conclusion: From Hope to Hard Choices

Uganda Airlines still has potential. It has assets, a growing brand, and a strategic position in a region with rising demand for air travel. But potential is not performance. And national pride, while emotionally resonant, does not pay lease rentals or fuel bills.

Unless prudence replaces hope as the organising principle — unless assumptions are challenged as rigorously as ambitions are proclaimed, the airline risks repeating its cycle: expansion, losses, leadership change, and renewed appeals to the taxpayer. That is not nation-building. It is expensive repetition.

And repetition, as we have been reminded, is only madness when we expect a different result.

IN THE NEXT FIVE YEARS: AFTER THE INCH, UGANDA MUST MIND THE MILE

Last week, President Yoweri Museveni was re-elected for another term in office, extending a political era that has now spanned four decades. 

Few administrations in the developing world have presided over such a long arc of economic change, and fewer still can credibly point to the turnaround Uganda has experienced since the late 1980s.

Whichever way one looks at it, today’s economy is a far cry from the dark days of super-inflation, commodity shortages and broken infrastructure. There was a time when prices doubled almost on a whim, when basics vanished from shop shelves, and when moving produce from farm to market was an exercise in endurance rather than commerce. Contrast that with the present: inflation that has largely been tamed, markets stocked with goods from across the region and beyond, and an infrastructure network that—while still incomplete—would have been unimaginable to an earlier generation...

At the core of this shift has been macroeconomic stability and the liberalisation of markets. These ideas may sound technocratic, even dull, but they are the quiet enablers of progress. Stable prices allow households to plan and businesses to invest. Liberalised markets, imperfect as they are, unlocked private initiative and forced efficiencies into an economy once strangled by controls. 

Over the years, billions of dollars have flowed into Uganda—some from foreign investors, many from local businessmen who finally felt confident enough to risk their own capital. The results are visible across banking, telecommunications, retail, construction and services.

But history offers a stern warning: success breeds temptation. Or, as the proverb goes, give them an inch and they will take a mile. With achievement come expectations; with stability come louder demands. That is natural. People who have known stability demand prosperity; those who have tasted growth demand inclusion. The challenge for the next five years is to meet these expectations without destroying the foundations that made them possible...

The first test is maintaining macroeconomic stability. Uganda has enjoyed such a long period of relatively low inflation that many have forgotten what inflation feels like. Amnesia is dangerous. It invites policy flirtations with ideas that sound compassionate but are fiscally reckless—most notably pouring billions into failing state enterprises. Inflation does not announce its return politely; it creeps in through budget indiscipline and explodes through excess. When it arrives, it punishes the poor first and hardest.

The second test is the management of oil revenues. Oil offers a once-in-a-generation opportunity to upgrade social services and the general business environment. Used wisely, it can finance healthcare, education, roads and energy—investments that raise productivity long after the last barrel is pumped. Used badly, it becomes a curse: consumption over assets, patronage over productivity. The difference is not oil itself, but discipline, transparency and execution.

A third temptation is to roll back liberalisation simply because government now has more resources. The argument that the state should “get back into business” resurfaces whenever revenues rise. It ignores history. Many state-owned enterprises did not collapse for lack of money; they collapsed due to poor management, weak incentives and terrible oversight. Fresh capital injected into unreformed governance structures is not reform, it is denial.

Then there is corruption—the tiger we do not want to ride. Corruption widens inequality, erodes trust and convinces citizens that the system is rigged. In the short term it masquerades as grease; in the long term it becomes sand in the gears. Left unchecked, it feeds resentment that can spill into unrest and political instability. Investors can price risk; they struggle with unpredictability born of public anger.

Yet even as we guard these fundamentals, there is another danger: resting on our laurels. Stability is not an end state; it is a platform. To sustain momentum—and, crucially, to spread the gains more equitably, we must take calculated risks. Not reckless leaps, but deliberate stretches that deepen inclusion without undermining the stability we have worked so hard to build...

Nowhere is this more urgent than agriculture, the livelihood of roughly seven in every ten Ugandans. For too long, our debates have stopped at production—plant more, harvest more. Productivity matters, yes, but production alone does not build prosperity. Farmers remain poor not merely because they produce little, but because they are disconnected from markets, locked out of processing, and squeezed in distribution.

The next phase must take a hard look at the entire value chain. Productivity on the farm must be matched by access to inputs and finance, reliable storage, processing capacity, logistics, branding and marketing. Markets must be enabled so that higher yields translate into higher and more stable incomes. When farmers see clear pathways to buyers, incentives change: investment rises, quality improves and risk becomes manageable. That is how agriculture becomes a business rather than a subsistence trap—and how wealth disparities begin to narrow.

If we get this right, another long-standing anxiety begins to fade: the youthful bulge. A young population is often spoken of as a threat, something we constantly look over our shoulders for. But youth are only a threat in an economy that cannot absorb their energy. In an economy that creates productive work, connects effort to reward and opens pathways up value chains, they become our greatest asset. The same reforms that deepen agricultural value chains and strengthen the business environment are the ones that turn demography into destiny.

The delicate task ahead is balance. We must continue doing what brought us this far—discipline, openness and stability—while stretching our capacities to include more Ugandans in growth. Get too excited and we risk inflation, waste and reversal. Move too cautiously and we risk stagnation, inequality and a squandered demographic dividend.

The story of the last forty years shows what sensible economics can achieve. The question for the next five is whether we can protect those gains, take calculated risks, and spread prosperity more evenly. The inch has been taken. The challenge now is to resist the mile—while still daring to move forward.