Africa: Fallout of CEO hiring Audit Team to investigate Ugandan Airlines as former CEO predicts 7 years of no Profit

Kinshasa uganda airlines Bamuturaki

A six-member team to investigate human resource irregularities in East African carrier Uganda Airlines have been set up by the Ministry of Works and Transport.

According to The Monitor, the Minister of Works and Transport, Gen Katumba Wamala, told legislators that the team is expected to complete the task by next month.

“I wrote to the Minister of Public Service and the executive director of the National Planning Authority requesting them to give me a technical team to conduct a manpower audit and evaluate the current capacity of the employees in Uganda Airlines,” Gen Katumba said. The audit comes a week after lawmakers on the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) established human resource challenges in Uganda Airlines.

The team is supposed to investigate whether Uganda Airlines’ current staff meet the minimum requirements as outlined in the human resource manual, the extent and effect of staffing gaps and also recommend a befitting salary structure for staff at various levels. The team is also supposed to establish whether the current staff are steering the entity towards the realisation of the national carrier’s mission and vision and if the current staff structure meets the staffing requirements as stipulated by the Uganda Civil Aviation Authority (UCAA).

The audit is also meant to find out if the staff has the minimum requirements, including academic qualifications, for the positions that they hold, according to the Ministry of Works and Transport. The team is also expected to highlight the unfilled positions in the entity, and identify challenges in the airlines in attracting and retaining competent staff. They will, however, not affect the managers of the airline including the chief executive officer (CEO) of the airline, Ms Jenifer Bamuturaki.

When asked why Ms Bamuturaki was appointed even when she never applied for the job and also lacked some of the requisite academic papers for the role, Gen Katumba said he was directed by President Museveni to appoint her and advised the committee to speak to the head of State for his input. “I did engage Jenifer on the issue of papers and I told her that you must submit those documents and she gave me assurance that she will submit,” Gen Katumba said.

The Cosase chairperson, Mr Joel Ssenyonyi (Nakawa West), said the only qualifications that Ms Bamuturaki submitted were her Senior Six papers. For a person to occupy such a position, they have to have a Master’s degree in a business-related course. On Tuesday, the leadership of the national carrier did not attend a meeting with Cosase, saying they were busy with other meetings and requested the interface to be rescheduled to September. They also said they want the committee proceedings closed to the media.

This is coming after Cornwell Muleya, the former Chief Executive Officer (CEO) of Uganda Airlines, has come out to say that the national carrier is failing to break even because of failure to implement the business plan. Although the revived airline was not expected to make any profits from the onset, without support structures and a growth strategy, Muleya said, it will take even longer for the national carrier to break even.

According to The Observer, Muleya was appearing before MPs on the committee on commissions, statutory authorities and state enterprise (Cosase) to weigh in on the Auditor General’s report for FY 2021. Muleya, who is himself facing charges of corruption and mismanagement of the airline, pleaded innocent and instead said he was hounded out of the airline by both internal and external forces after lifting the lid on the corruption tendencies of the current CEO Jennifer Bamuturaki who was then commercial director.

For example, he cited an incidence when Bamuturaki allegedly over-invoiced the airline by up to $232,000 instead of the actual $172,000 to pay Abbavater Group, a firm she is said to hold and own business interests for public relations and advertising services. During her previous interactions with Cosase, Bamuturaki said she is not “legally connected” to Abbavater. It should be recalled that Muleya was opposed to Bamuturaki’s appointment even as commercial director and now CEO. The recent appointment of Bamuturaki by President Museveni to replace Muleya has since caused a lot of controversy and debate amongst Ugandans and the aviation industry, especially in regard to her competence and education qualifications.

Muleya’s previous appraisal of Bamuturaki reportedly read: “she’s concerned more with politics than role and interest of the airline, works against the company, candidate lacks commitment to task and role, works as a lone ranger and pursues her interests instead of task, not-appreciative of digital marketing as the main tool for service/product promotion, and not ready with skills for the role in a start-up airline.”

Muleya told MPs that his purportedly high salary of Shs 126 million per month was justified because when he came in October 2019, Uganda Airlines had nothing workable and he had to start from scratch. He said that he first came in as a consultant and was earning Shs 70 million, and upon his appointment as acting CEO, his salary increased to Shs 118 million and then to Shs 126 million when he was confirmed in the position. “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 said.

BUSINESS PLAN

Muleya further told the MPs the airline is lacking business partnerships with competing airlines and countries yet it is these partnerships that would extend the national carrier’s reach and routes. For instance, he said the long-haul 252-seater Airbus A330 is currently only flying 33 hours a month to only one destination, Dubai and yet it is meant to fly at least 10-15 hours a day. He said with the implementation of a business plan, the airline would have been able to open up more routes and partnerships.

“Now the A330 is flying to Dubai but it is flying taking Ugandans and bringing Ugandans back mostly. That is point-to-point traffic. You have to have the benefit for all the other people who fly into Dubai and want to connect to Africa. So it means you have to create a partnership in Dubai, and that is why he had said from the beginning we’d started discussing with Emirates for a cooperation agreement and they had agreed to cooperate with us even before attaining the IOSA [operational evaluation and management of an airline] for them to feed us on a one way interline. It is the same thing when you go to Nairobi, we’re competitors with Kenya Airways, we’re competitors with other airlines flying there but we’re still cooperating in the industry because we feed each other with traffic through the interline agreement,” said Muleya.

“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…From the beginning, we were discussing for a cooperation agreement with Emirates for them to feed us 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 added.

The airline has so far incurred losses of over Shs 500 billion since it was revived three years ago. Asked whether as a former CEO, his team had anticipated to start with losses and thereafter pick up, Muleya said the losses were expected since the airline’s aircraft were underutilised – flying to 9 routes out of 20 and flying just five hours out of 10. In October this year, Uganda Airlines is expected to launch its second intercontinental route to China.

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