One month after suspension, Air Uganda counts billions in losses

It is one month since Air Uganda was grounded, how has this impacted on the business of the airlines?

We are not earning any revenue because we cannot sell tickets to the public since we are not flying. Our customers were heavily inconvenienced. After receiving notice of withdrawal of the Air Operator Certificates (AOC), we had a lot of difficulty in managing customers who had already purchased tickets. We did everything possible to re-plan their journeys by booking with our partner airlines but we know they would have preferred to fly with us.

What is the amount of losses you have suffered, so far, in monetary terms?

Typically, an airline of our size spends millions of dollars per month on areas like engineering, personnel, various staff stations, structures, systems and getting aircrafts flying. Without being specific and giving a figure, that is the magnitude we are talking about. Since it is a month without operation or earning anything, obviously our losses are in millions of dollars.

How did the suspension come about?
The matter stemmed from external sources. There was an audit of the Civil Aviation Authority (CAA)onducted by the International Civil Aviation Organization (ICAO) from June11th to June 17. Such audits are conducted in five year cycles. CAA was last audited in 2008. Everyone in the industry knew that auditing was going to take place this year because the five years from 2008 had elapsed.
The audit looks at areas like license procedures, the inspection procedure, the regulations, the safety procedures, and the equipment the regulator uses to oversee the industry.

The practice is such that if the regulator (CAA) is doing well and the operators are doing well then it is fine. If the operators are not doing well then CAA will correct us because they are the regulators. But if ICAO finds some weaknesses with the CAA, there is a problem and the entire industry is affected. It does not matter whether the operators are okay. So at the end of the audit on June 17, some weaknesses were noted. On the same day we received a letter from CAA telling us that our AOC had been withdrawn. They informed us that to safeguard the industry in Uganda they were withdrawing the AOCs from all International Air Operators. The AOC is what allows you to fly to other countries.

Are you suggesting that the claims about you not meeting the safety standards are baseless?

We have also been reading those reports in the papers but we do not know where they are coming from. It was CAA that was being audited and the findings were on them not us. The audit was not about the airlines but the Authority and what they do to regulate the industry. We as an airline have been making sure that our standards are very high and that we meet the best international practices. We have certificates for IATA Operational Safety Audit. We received the certificate after the first audit in 2011 and we renewed it in 2013 (last year).

Without these certificates you cannot be accepted in some markets and you cannot be a member of International Air Transport Association (IATA). You cannot maintain a membership in IATA if you do not meet these internationally required standards. These are the same standards that Emirates, British Airways, Qatar Airways and everyone in the industry uses. Everything we do follows the operating procedure. We are satisfied with our safety policies and standards.

When are you getting back in the air?

We were aised that the process would take weeks. This implies the period of grounding is going to be a long one because we have already been grounded for more a month. And I have to explain that coming back is not like switching on after switching off. It is a whole new investment.

To resume operations, we have to get back into systems especially the international bookings systems. Because when you are not operating you are removed from the ability to get people to see you and sell your tickets. So to resume operations you have to file your timetables again, you have to market and get demand coming back otherwise you will be flying empty because people do not know you are back there.

Hasn’t this predicament tainted your reputation?

Reputation is a big concern because we have built a very successful and high standards airline. From the time we started in 2007, it has been growing at a rate of almost 20 per cent per annum in terms of passengers we carry. It has been growing its revenue and routes in the market to a point where in some parts people depend on it solely to connect to other parts.

SOURCE: Daily Monitor

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