After having its Air Operator’s Certificate revoked by the Ugandan Civil Aviation Authority, Air Uganda has suspended its operations indefinitely.
An audit of the Uganda Civil Aviation Authority’s policies and procedures was conducted in June by the international regulator ICAO (International Civil Aviation Organisation) based in Montreal. Such audits are aimed at assessing the CAA’s capacities rather than the airlines that operate under its supervision. The audit revealed shortcomings in the CAA’S oversight and regulatory capacities, consequently impacting the CAA’s ability to award Air Operators Certificates (AOC).
The Ugandan CAA opted to withdraw AOCs for all international commercial air operators registered in the country. Carriers were requested to submit fresh AOC applications, and in the meantime were required to cease operations.
Air Uganda has been working with the Uganda CAA to implement revised procedures required by ICAO and had expected its AOC to be reinstated timeously. Unfortunately, 31 days have elapsed and recertification is still several weeks away.
The result of this prolonged period of grounding has affected key contracts at Air Uganda. In particular, covenants in the aircraft lease agreements require that the aircraft can remain on lease to Air Uganda only as long as the airline continues flying. The extended period of the aircraft remaining grounded has triggered these covenants and Air Uganda is now contractually obligated to return the aircraft to the lessors’ chosen facility abroad. The prolonged inability to generate any revenues has necessitated the airline’s Board of Directors to suspend indefinitely Air Uganda’s operations.