Uganda Air Cargo Corporation Nursing Shs8b Loss

13 November 2019

Parliament — Uganda Air Cargo Corporation has asked Parliament to support a Sh8b bailout from losses registered in 2014.

The corporation is the business airline operated by the Ministry of Defence, incorporated by an Act of Parliament in 1994.

The carrier operates scheduled and charter cargo and passenger services from its main base at Entebbe International Airport, with destinations limited to East and Central Africa.

Capt John Otekat, the chairperson of the board for the Air Cargo, while appearing before the Defence and Internal Affairs Committee of Parliament yesterday, said the airline registered the loss during a shutdown between 2014 and 2016 when its operator certificate was revoked by the International Aviation Organisation.

However, three years since it resumed its operations, the airline is limping with the loss yet two of its aircraft remain grounded due to cracks on their centre wing box.

"This is the heart of the aircraft, it is the one holding the wing, the head and the tail, it is like a thorax of an insect," Capt Otekat said.

The Corporation has appealed to Parliament for a $15m (Shs55.46b) support of which $10m (Shs37b) is for repairing the centre wing box of the grounded C-130 aircraft while the remaining $5m is for the purchase of a new Boeing B7337-500.

The continued grounding has left the carriers operating with only one cargo aircraft with no back up in the event of an emergency or multiple activities.

This has cost the airline, not only in revenue, but also confidence from its clients.

"There was a loss of key clients like the UN, we lost business and confidence from our clients," Capt Otekat added.

The company recently lost a $11m (Shs40.6b) deal from the USA due to lack of capacity to handle delivery of the items.

For most of its life until 2009, the company has owned one aircraft, a Lockheed C-130 Hercules. In October 2009, the fleet was expanded by the addition of two Harbin Y-12 turboprop aircraft, and a second Lockheed C-130 Hercules acquired in 2012.

The corporation further decried challenges, especially the failure to fund existing programmes by the government. For the last 20 years, the airline has not received money from the government.

The committee that is chaired by Amolator Woman Memeber of Parliament Doreen Amule has now advised the Defence ministry to ensure that the corporation's requirements should be included in the Budget for the 2020/2021 Financial Year.

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