Cornwell Muleya, the former Chief Executive Officer (CEO) of Uganda Airlines, has laid bare that the national carrier is failing to break even because of failure to implement the business plan.
Muleya, who claimed that he was first appointed as a consultant by the Prime Minister, was appearing before the Committee on Commissions Statutory Authorities and State Enterprise (COSASE) chaired by Hon. Joel Ssenyonyi on Wednesday, 24 August 2022.
The committee is probing into the operations of the airline on the back drop of the Auditor General’s report for the financial year ended 2021.
The former chief executive said that the airline is currently flying way less routes and hours than they should partly because of a lack of partnerships with other countries and airlines that would extend their routes to capture more travelers.
Muleya, a Zambian, further explained to the committee that what is currently missing at the airline is the structure and system to support its entire growth strategy.
“Without critical mass, the airline will not break even, because you remain too small for the investment you have made. The business plan has to be implemented in its entirety for it to bring the payback,” he said.
He said the Airbus A330 for instance, is currently flying 33 hours a month to only one destination, and yet it is meant to fly at least 10, 12 or 15 hours a day and the routes need to be opened to create the feed in the business plan.
Upon prompting from MPs, Muleya said that as a consultant, he was earning Shs70 million and upon his appointment as acting CEO, his salary increased to Shs118 million and then Shs126 million when he was confirmed in the position.
He told the committee that he was fought out of the airline over claims that he was corrupt and that things were not going on well and yet he was focused and determined to see the airline grow.
“When I came in, there was nothing like Uganda Airlines here. There was no plan, no desk or papers. Nothing! I had to build the plan, negotiate and this is not a small task. I was going into meetings reading documents of 300 pages on airline purchases on my own,” he revealed.
On recruitment at the airline, Muleya, who denied any wrong doing whilst at the helm of the airline, told the committee that there were several external factors interfering with the recruitment process and believes that his non tolerance for corruption could have cost him the job.
He revealed that he had nipped in the bud a transaction originated by then Commercial Director and now CEO of the airline. He claims that in her previous role, she had over invoiced the airline by up to US$232,000 to pay Abbavater Group for PR and advertising services.
Several MPs, including Hon. Martin Muzaale the Buzaya County MP asked Muleya, currently on trial for disobeying orders the Inspectorate of Government, who was looking into the affairs of the airline, to explain the loses experienced by Uganda Airlines.
Hon. Victor Nekesa, one of the 10 army representatives in the House tasked Muleya to explain if in the initial stages of Uganda Airlines, they had projected that the airline would start with loses and thereafter, pick up.
“You cannot make profits if you have only opened nine routes out of 20 because your aircrafts are underutilised. If your aircrafts are flying five hours a day and they are meant to fly nine or 10 hours a day, it means you are not able to break even,” he added.
Using the A330 that flies to Dubai as an example again, Muleya said the plane had a point-to-point traffic where Ugandans fly to Dubai and return by the same plane and yet the airline could enter into a partnership to ensure that it flies all the people from Dubai into Africa.
“From the beginning we were discussing for a cooperation agreement with Emirates for them to feed as on a one-way interline. In this, they give us passengers from Pakistan and India so that they augment the point-to-point traffic – those structures have to be put in place,” he revealed.
Meanwhile, a Minister in Museveni’s Government has made it clear to Ssenyonyi that Uganda Airlines CEO Jennifer Bamuturaki will not appear before Cosase very soon, and that the earliest she can appear will be next month. (Read Story Here).