KAMPALA, Uganda — A government audit has uncovered nearly $9.2 million (Shs 35.2 billion) in passenger service fees that appear unaccounted for at Uganda Airlines. With weak oversight and management missteps exposed, questions are mounting over who should be held responsible—and what this means for the future of Uganda’s national carrier.
The Auditor General’s Special Audit Report on Revenue Management and Aviation Fuel Management for FY 2021/22 to 2023/24 found that despite a formal communication to end a $30 service fee, airline staff and sales agents continued charging it for a full year.
An email dated June 26, 2023, from the Manager of Revenue Management, explicitly stated that “effective 1st July 2023, the USD 30 service fee for walk-in ticket purchases at airline offices would no longer apply.”
However, the audit revealed a significant breach: “analysis of the detailed sales report for the period 1st July 2023 to 30th June 2024 revealed that service fees totaling USD 9,294,640 were still charged across multiple Uganda Airlines offices and General Sales Agents.”
The report implicated stations in Kampala, Entebbe, Dar es Salaam, Nairobi, Juba, Kilimanjaro, and Johannesburg. Most troubling, auditors noted: “There was no evidence of these service fee collections being banked, raising concerns about potential misappropriation.”
Weak governance and management’s response
The audit report also exposed serious governance failures within the airline’s top management.
“There was no evidence of Board approval for the policy change,” the auditors wrote, adding that the failure to enforce the new policy “led to the irregular collection of service fees, with a risk of unbanked or misappropriated funds. Moreover, implementing such a revenue-impacting policy without formal Board approval undermines accountability and weakens governance.”
The audit attributed the scandal to “non-compliance by responsible station staff, likely caused by inadequate supervisory oversight, and a lack of monitoring controls.”
In its official response, Uganda Airlines management acknowledged the findings but defended its actions.
“Management has reviewed the documents in question and observed instances of ticket reissuance in which case the service fee would have been collected on the original ticket,” the airline said in a brief to auditors.
Management also pushed back against the auditor’s recommendation for stronger board involvement, stating: “Board involvement in operational decisions such as pricing distorts requisite dynamic decision-making by management as well as governance.”
Despite this, the matter was eventually presented to the Board in July 2023. Under Resolution 4, “the Board resolved that the service fee currently charged on the tickets be scrapped and its implementation is discontinued immediately.”
The Auditors, acting on the president’s instructions, ordered Uganda Airlines to “conduct a thorough investigation to determine why the USD 9,294,640 in service fees was irregularly charged and whether the funds were banked or misappropriated,” adding that if the funds were not banked, management should “hold the responsible staff accountable and take appropriate corrective action, including disciplinary measures or recovery of funds.”
Also Read: Uganda charges eight finance officials with corruption, money laundering
Sources indicate that auditors instructing management to investigate its own issues may not yield a successful outcome.
For a national carrier relaunched barely five years ago with taxpayer funds, these findings strike at the heart of the airline’s credibility.
Aviation analysts warn that financial leakages, where millions can vanish through weak controls and non-compliance, are particularly devastating for a young airline still struggling to achieve profitability.
“This is not just about missing money,” said one aviation governance expert.
“For a start-up airline, every dollar counts. These kinds of behaviours undermine investor confidence, weaken international partnerships, and damage the carrier’s ability to compete regionally.”
This missing $9.2 million is the latest in a series of financial and governance concerns at Uganda Airlines, which has also faced allegations of irregular aircraft procurement deals, ticketing conflicts of interest, and fuel supply scams.
