Former Uganda Airlines CEO Cornwell Muleya has warned that the flag carrier is operating without a business plan and may not break even in the near future.
Although the revived airline is not expected to make a profit from the start, without support structures and a growth strategy, Muleya said, it will take even longer for the flag carrier to break even.
Muleya was appearing before MPs from the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) on Wednesday to weigh in on the Auditor General’s report for the financial year 2021. Muleya, who himself faces corruption charges and mismanagement of the airline, pleaded innocent and instead said he was forced out of the airline by internal and external forces after he exposed current CEO Jennifer Bamuturaki’s corrupt tendencies. , who was then commercial director.
For example, he cited an incident when Bamuturaki allegedly overcharged the airline by up to $232,000 instead of the actual $172,000 to pay Abbavater Group, a company she allegedly owns and has business interests for public relations and advertising services.
In her previous interactions with Cosase, Bamuturaki said she was not “legally bound” to Abbavater. Recall that Muleya had opposed the appointment of Bamuturaki even as commercial director and now CEO. Bamuturaki’s recent appointment by President Museveni to replace Muleya has since sparked much controversy and debate among Ugandans and the aviation industry, especially regarding his skills and credentials.
Muleya’s previous assessment of Bamuturaki reportedly read: “she cares more about politics than the role and interests of the airline, works against the business, candidate lacks commitment to task and role , works like a lone ranger and pursues interests over task, dislikes digital marketing as a primary service/product promotion tool, and is not ready with the skills for the role in a start-up airline. “
Muleya told MPs that his allegedly high salary of 126 million shillings per month was justified because when he arrived in October 2019, Uganda Airlines had nothing viable and he had to start from scratch. He said he first came in as a consultant and earned 70 million shillings, and upon his appointment as acting CEO his salary rose to 118 million shillings and then to 126 million shillings when he was confirmed in the post.
“When I arrived, there was nothing like Uganda Airlines here. There was no plan, no office or papers. Nothing! I had to build the plan, negotiate and it’s not a small task. I would go to meetings reading 300-page documents about airline purchases on my own,” he said.
Muleya further told MPs that the airline lacked commercial partnerships with competing airlines and countries, but it was these partnerships that would expand the reach and routes of the national carrier.
For example, he said the 252-seat long-haul Airbus A330 currently only flies 33 hours a month to one destination, Dubai, and yet it is supposed to fly at least 10-15 hours a day. He said that with the implementation of a business plan, the airline could have opened up more routes and partnerships.
“Now the A330 is flying to Dubai but it is flying picking up Ugandans and mostly bringing Ugandans back. connect to Africa so that means you have to create a partnership in Dubai and that’s why he said from the beginning that we started talking with Emirates for a cooperation agreement and they agreed to cooperate with us even before reaching IOSA. [operational evaluation and management of an airline] so that they feed us on a one-way line spacing. It’s the same when you go to Nairobi, we’re competitors of Kenya Airways, we’re competitors of other airlines that fly there but we still cooperate in the industry because we feed each other traffic through interline agreement,” says Muleya.
“Without critical mass, the airline will not break even because you are still too small for the investment you have made. The business plan needs to be implemented in full for it to pay off… a cooperation agreement with Emirates for them to feed us on a one-way interline in which they give us passengers from Pakistan and India so that they increase point-to-point traffic – these structures need to be put up,” he added.
The airline has so far suffered losses of more than 500 billion shillings since its relaunch three years ago. Asked if, as former CEO, his team had planned to start with losses and then resume, Muleya said the losses were expected since the airline’s planes were underutilized. – flying 9 out of 20 routes and only flying five out of 10 hours.
In October this year, Uganda Airlines is expected to launch its second intercontinental route to China.