Uganda Airlines is not merely a company incorporated under the Companies Act, Cap. 106. It is a national emblem, a strategic infrastructure asset, and a repository of public trust. It carries not only passengers across borders, but the aspirations of a country seeking visibility, competitiveness, and economic sovereignty in a globalized economy. As a state-owned enterprise, it exists at the intersection of commerce and conscience, where profitability must coexist with legality, and ambition must submit to accountability.
History, however, has an unforgiving memory. Institutions that fail to interrogate their past with honesty and discipline are condemned to repeat it, often at greater financial, institutional, and moral cost. The collapse of Uganda Airlines in 2001 was not caused by turbulence in the skies. It was brought down by turbulence in governance: compromised boards, politicized management, uncontrolled expenditure, opaque procurement, and the slow erosion of fiduciary responsibility. The airline did not fall because aviation was unviable; it fell because governance became optional.
The revival of Uganda Airlines was therefore never meant to be merely operational. It was meant to be philosophical; a recommitment to discipline, legality, and institutional integrity. It was supposed to signal that the mistakes of the past had been understood, internalized, and structurally corrected. What has unfolded instead is a sobering reminder that capital without governance is wasted ambition, and that revival without reform is merely failure postponed.
This is not a uniquely Ugandan narrative. Kenya Airways, once hailed as the benchmark of African aviation governance, slid into prolonged distress through a familiar sequence of executive dominance, weakened boards, procurement controversies, unsustainable fleet expansion, and a creeping culture in which optimism displaced oversight. The uncomfortable truth is that Uganda Airlines appears to have walked a path already scorched by its neighbour, despite the warning signs being well documented and painfully visible.
At the heart of both experiences lies a recurring failure: corporate governance was treated as a ceremonial obligation rather than a binding legal discipline.
Corporate Governance Is Not a Choice; It Is a Statutory Command
Corporate governance is not an abstract ideal. It is the system through which companies are directed, controlled, and held accountable. The Companies Act, Cap. 106 does not speak in the language of aspiration; it speaks in the language of duty. Directors are required to act in good faith, in the best interests of the company, and with the care, skill, and diligence that a reasonable person would exercise in comparable circumstances. These obligations are neither symbolic nor discretionary. They are enforceable duties grounded in statute and reinforced by common law.
The Act places the board at the apex of corporate accountability. It is the board that must ensure the integrity of financial reporting, the existence of effective internal controls, compliance with procurement and employment laws, ethical conduct, and strategic risk oversight. Management executes; the board governs. Where this line collapses, corporations drift into executive capture, institutional confusion, and ultimately, failure.
Uganda National Airlines Company Limited presents not a case of isolated misjudgment, but of systemic governance decay; a slow corrosion of accountability, transparency, independence, and ethical restraint.
Leadership Without Legitimacy: When Process Is Sacrificed, Authority Collapses
Few governance failures are as destabilizing as compromised leadership legitimacy. The controversy surrounding the appointment of the Chief Executive Officer did more than raise procedural concerns; it struck at the heart of corporate authority itself. Under Cap. 106, the appointment of executive management is a core, non-delegable board function, designed to be exercised through transparent, competitive, and merit-based processes precisely because executive power derives its legitimacy from process, not proximity.
By circumventing an ongoing professional recruitment exercise, the airline undermined its own governance architecture. Authority became contested, accountability lines blurred, and internal cohesion weakened. In corporate governance, perception matters almost as much as legality. A CEO who assumes office under a cloud of procedural irregularity inherits institutional fragility from day one.
Leadership in a state-owned enterprise is not validated by political endorsement or executive confidence. It is validated by competence, integrity, and fidelity to process. Where process is sacrificed, governance credibility collapses.
A Board That Occupied Seats but Did Not Govern
The suspension of both the board and senior management was not an act of renewal; it was an admission of institutional failure. Under the Companies Act, delegation of authority does not amount to abdication of responsibility. Directors remain collectively and individually accountable for oversight, regardless of how much operational authority is assigned to management.
The evidence presented before Parliament, the Auditor General, and investigative bodies reveals a board that failed to assert its supervisory role. Procurement proceeded outside approved plans, staff structures and remuneration frameworks were implemented without formal approval, financial controls were either weak or ignored, and accountability mechanisms were conspicuously absent. These were not mere administrative lapses; they were breaches of fiduciary duty.
A board that does not interrogate management, does not demand explanations, and does not enforce discipline ceases to function as a governing organ. Under Cap. 106, such silence is not neutrality; it is breach.
Procurement as a Gateway to Value Destruction
Nowhere was governance failure more visible than in procurement. At Uganda Airlines, procurement drifted from being a safeguard of value into a conduit for leakage and impropriety. Contracts were awarded without Contracts Committee approval, procurements were undertaken outside approved plans, and intermediaries were engaged without justification, inflating costs and eroding transparency.
Beyond Turbulence: The Corporate Governance Question Behind Uganda’s Airline ChallengesThe Public Procurement and Disposal of Public Assets Act exists precisely to prevent this descent into discretion without accountability. In public enterprises, procurement is not merely operational; it is constitutional. Once procurement discipline collapses, misuse of public funds becomes predictable rather than accidental.
Financial Management Without Discipline Is Governance Theatre
Financial reporting is the primary mechanism through which a company tells the truth about itself. At Uganda Airlines, that language became unreliable. Accumulated losses exceeding hundreds of billions of shillings, missing passenger revenues, unexplained salary disparities, advance payments without safeguards, and persistently negative returns on assets point to an institution operating without financial discipline.
The Companies Act requires proper books of account and accurate financial statements not as formalities, but as accountability instruments. When financial information becomes incoherent, decision-making deteriorates, oversight becomes impossible, and public trust evaporates. What emerges instead is an institution sustained not by performance, but by repeated fiscal intervention; a model that is economically unsustainable and institutionally corrosive.
Ethics: The Invisible Architecture That Collapsed
Ethical leadership is the cultural infrastructure upon which governance systems rest. Rules alone cannot sustain institutions when ethical restraint erodes. Actions such as bypassing procurement systems for communications contracts or engaging external actors outside approved structures were not merely irregular; they signalled ethical disintegration.
Once ethical norms weaken, governance systems lose effectiveness even when formal rules remain intact. Uganda Airlines did not merely suffer financial loss; it suffered moral erosion.
Kenya Airways and the Cost of Ignored Lessons
Kenya Airways’ crisis was not sudden. It was the product of years of governance erosion: weak boards, ambitious fleet decisions unsupported by financial realities, procurement controversies, and unchecked executive power. Uganda Airlines appears to have mirrored this trajectory, despite the availability of clear regional lessons. Risk management is not a managerial preference; it is a board obligation. Failure to learn is itself a governance failure.
The New CEO: Governance’s Final Test
The appointment of a new CEO must not be treated as damage control. It must be understood as a governance inflection point. The process must be transparent, competitive, and board-led, not merely to comply with law, but to restore legitimacy.
Whoever assumes that office will inherit disorder. Their first obligation will not be expansion, branding, or fleet growth, but the restoration of internal controls, procurement discipline, financial integrity, and ethical culture. Charisma will not rescue Uganda Airlines. Only governance discipline will.
Flight or Freefall: Governance Will Decide
Uganda Airlines still holds strategic relevance and national value. But no airline, however well capitalized, can outfly bad governance. This saga is not fundamentally about individuals; it is about whether corporate governance will be treated as law, culture, and discipline, rather than rhetoric.
The Companies Act, Cap. 106 provides the framework. Corporate governance principles provide the operational discipline. Ethical leadership provides institutional legitimacy.
Until these pillars are enforced, Uganda Airlines will remain airborne only on taxpayer oxygen; climbing endlessly, but never cruising.
History, once again, will not be kind.
Written by Kalikumutima Deo, Kalikumutima & Co Advocates
