Uganda Airlines’ Turnaround Bet: Rebuilding a Grounded Fleet While Chasing Hub Ambitions

Girma Wake, the former Ethiopian Airlines chief executive who took over Uganda Airlines in February, has set a target of reaching break-even by 2030. Between a partially grounded fleet, a landmark order with Boeing, and a regional hub strategy modelled on Addis Ababa’s playbook, the national carrier is attempting to break a cycle of chronic losses without abandoning its continental ambitions.

A Leadership Change Under Financial Pressure

Girma Wake’s appointment as CEO fits a familiar regional pattern: bringing in an executive who steered Ethiopian Airlines toward becoming Africa’s benchmark airline group, in the hope of replicating part of that trajectory at Entebbe. His message breaks with practices seen at several state-owned carriers across the continent — a national airline, he argues, cannot function sustainably on permanent budget support without also building the mechanisms for its own financial independence.

The starting point is grim. According to Uganda’s Parliamentary Public Accounts Committee, the airline posted a net loss of UGX 237.9 billion in the 2023/24 financial year, even as passenger revenue grew 58%, cargo revenue 55%, and excess-baggage revenue 63%. That paradox — revenue growth alongside widening losses — points to a cost structure under strain, driven largely by wet-lease arrangements and an underutilised fleet.

A Fleet to Rebuild Before It Can Grow

When Wake took over, Uganda Airlines had six aircraft, three of which were grounded due to engine and maintenance issues — accounting for nearly 85% of the carrier’s total capacity and leaving effective utilisation at around 15%. One A330 has since returned to service after an engine was transferred from another aircraft, while the grounded CRJ900 is expected to fly again once its engine, currently under repair in the United States, is reinstalled. The second A330 could remain grounded until early 2027, with its engines undergoing repair in Singapore.

In the meantime, the airline is relying on a wet-leased aircraft from Ethiopian Airlines to sustain its flight schedule — a costly stopgap that management wants to phase out in favour of dry-lease arrangements, under which Uganda Airlines would provide its own crew, maintenance and insurance. That shift hinges on a precondition: building the technical and regulatory capacity needed to operate independently.

This is the backdrop to last month’s order placed directly with Boeing — a first for the carrier — covering four 737-8s and four 787-9 Dreamliners, with deliveries staggered between 2032 and 2033. The long horizon signals a structural renewal strategy rather than a response to the airline’s current operational squeeze.

The Hub Model: Feeding Africa Before Going Long-Haul

Strategically, Uganda Airlines is choosing to defer new long-haul routes in favour of building out its regional network first. The economic logic Wake lays out is straightforward: flying widebody aircraft on intercontinental routes without sufficient load factors deepens losses, whereas smaller aircraft on one-to-three-hour regional rotations can capture traffic at a lower hourly cost and feed it into Entebbe.

The stated ambition is to replicate, at Ugandan scale, the hub model deployed by Ethiopian Airlines in Addis Ababa or by Emirates in Dubai — where more than 80% of traffic consists of connecting passengers. Kigali and Accra are named as initial target markets, ahead of a planned expansion into the Democratic Republic of Congo and Cameroon. This positioning puts Entebbe in direct competition with other East African hubs, at a time when Nairobi, Addis Ababa and Kigali are already vying for the role of regional gateway to East and Southern Africa.

Wake also argues for greater cooperation among African carriers, noting that roughly 80% of the continent’s international traffic is currently captured by non-African airlines — a reminder of the aviation-sovereignty debate that runs through discussions around the Single African Air Transport Market (SAATM).

Domestic Tourism and Infrastructure: The Weak Link

The decision to retain the CRJs despite their recurring maintenance issues reflects a separate objective: supporting domestic tourism. Wake points to a structural disadvantage Uganda faces relative to neighbouring Rwanda in gorilla tourism — up to eleven hours of road travel to reach the habitats, compared with Rwanda’s more developed access infrastructure. His proposal is to build small, low-cost regional airstrips near key tourist sites rather than oversized international-style terminals. If realised, this approach could redirect some of the tourism value currently captured by road operators and regional competitors.

Training, MRO and Catering: Rebuilding the Local Value Chain

Beyond the fleet, the turnaround strategy extends across the carrier’s value chain. A partnership with Boeing is intended to revive the Soroti flying school, with equipment, tools and funding support — the airline has already offered to absorb an entire graduating class of eight, five pilots and three engineers, despite having no dedicated budget line for them. The stated five-year goal is to systematically absorb the school’s graduates.

Management also wants to bring in-flight catering in-house, currently outsourced, and strengthen control over cargo handling — the carrier moves between 20 and 23 tonnes of freight per flight to London without controlling that logistics chain itself. A first 737 freighter is expected in the third quarter of 2027, marking a diversification into cargo, positioned as a potentially more stable growth driver than passenger traffic alone.

What This Means for the Market

For industry players, Uganda Airlines’ trajectory illustrates a familiar tension among state-owned African carriers: balancing financial discipline with hub-building ambitions amid a constrained fleet and costly leasing dependence. For lessors and aircraft financiers, the stated shift toward dry leases opens a negotiating window, provided the carrier can build up its internal technical capacity. For neighbouring states and rival hubs, Entebbe’s push to establish itself as a connecting point adds another competitor to an already contested race for transit traffic among Nairobi, Addis Ababa and Kigali. For investors eyeing MRO and aviation training, the Soroti school revival and the carrier’s maintenance-infrastructure needs point to potential opportunities — contingent on the promised funding materialising over time.

Outlook

Wake’s 2030 target remains contingent on several unknowns: whether the fleet will be fully available by then, whether the Ugandan government can support the transition without reproducing the permanent-support model Wake says he wants to break, and whether regulatory backing proves sufficient to develop independent MRO and catering capabilities. Should the hub bet pay off, it would mark part of a broader reshaping of East Africa’s aviation map, where the battle to capture connecting traffic is becoming as much a strategic as a commercial imperative.