The Observer (Kampala)

21 July 2014

Uganda: Suspended Air Uganda to Return Leased Planes

Photo: AMISOM
Air Uganda (file photo): Uganda airlines grounded over safety audit measures.

Air Uganda is to return the planes it had leased from a contractor in Europe, after announcing that it had suspended its operations indefinitely.

In a statement released on Friday, Air Uganda Chief Executive Officer Cornwell Muleya said the prolonged grounding of the airline had in turn affected a number of key contracts that its management had signed.

"Covenants in the aircraft lease agreements require that the aircraft can remain on lease to Air Uganda only as long as the aircraft continues flying," said the statement. "The extended period of the aircraft remaining grounded has thus, sadly, triggered these covenants and Air Uganda is now contractually obligated to return the aircraft to the lessors' chosen facility abroad."

The embattled airline was grounded on June 17 when the Civil Aviation Authority (CAA) withdrew its air operator's certificate (AOC) on the back of an audit by the International Civil Aviation Organisation (ICAO). The Observer reported exclusively on Friday that the June 17 suspension was preceded by at least a dozen mechanical faults involving Air Uganda planes over a 12-month period.

In its statement, Air Uganda maintained that it was the CAA, rather than the airline, whose safety measures were found wanting by the ICAO audit mission. The audit was conducted from June 11 to 17.

"Such audits are aimed at assessing the CAA's capacities rather than the airlines that operate under its supervision. It is now apparent that the audit revealed shortcomings in the CAA's oversight and regulatory capacities, consequently impacting the CAA's ability to award air operator's certificates," said Muleya in the statement.

According to Air Uganda, instead of fixing its own shortcomings, CAA took a unilateral decision to withdraw AOCs for all international commercial air operators registered in the country, without consulting the affected airlines.

"Air Uganda, which is the only scheduled passenger airline affected, has inevitably suffered the greatest damage," wrote Muleya, adding that the airline had been contributing about $15m per annum directly into Uganda's economy.

CAA says it has asked the affected airlines to submit fresh applications for AOCs.

"They are right now going through a re-certification process, and that is where we are concentrating our efforts," said CAA Spokesman Ignie Igundura in an interview last week.

Muleya, who noted that Air Uganda was certified by the International Air Transport Association (IATA), said the suspension by CAA had forced the Aga Khan-owned private airline to incur massive financial losses on a daily basis and suffer reputational damage.

The indefinite suspension of Air Uganda's operations is likely to affect the employment contracts of its 231 employees. By the time of its suspension, Air Uganda was operating flights from Entebbe to Nairobi, Dar es Salaam, Bujumbura, Kigali, Mogadishu, Kilimanjaro, Mombasa and Juba.

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