Air Uganda has suspended its operations indefinitely citing prolonged grounding, which it says has affected key contracts. This is contained in a July 18th statement signed by Conwell Muleya, the Chief Executive Officer Air Uganda, a copy of which our AUTO reporter has seen. Muleya states that on June 17th, 2014 Civil Aviation Authority withdrew Air Operators Certificate for all commercial operators registered in the country, without consulting the affected parties.
According to Muleya, Air Uganda, which is the only scheduled passenger airline affected, have inevitably suffered the greatest damage. He says each company was required to submit a fresh application for the Air Operators Certificate and in the meantime cease operation, which forced them to incur heavy financial loses and suffer reputational damage.
Muleya says Air Uganda has been working with CAA to since June 17th to implement the revised procedures required by the International Civil Aviation Organization to be reinstated in a timely and expeditious manner in vain. He explains that unfortunately 31 days have elapsed and recertification is several weeks away.
Muleya argues that the prolonged grounding has in turn affected key contracts at Air Uganda. Particularly, affected are covenants in the lease agreement, which state that the aircraft can only remain in Uganda if it continues flying. He however, says the extended period of grounded has triggered the covenants, and Air Uganda is contractually required to the lessor’s chosen facility abroad.
Muleya says the prolonged inability to generate revenue has forced the board of directors to suspend indefinitely the operations of Air Uganda in the country.