Uganda airlines secures Air Services Licence, ramps up to February Certification

October 16, 2018 in Business, Companies, Infrastructure, Transport by Editor

October 16, 2018 – Uganda is racing towards a February 2019 target to achieve a Uganda CAA Air Operators Certificate AOC, after securing an Air Services Licence ASL, from the regulator at the start of September.

The comeback flag carrier was one of several applicants whose application for an ASL was the subject of a public hearing on August 23.

A source close to the project says the CAA provisionally issued the ASL as the regulator and the Ministry of Works, mull over whether Uganda Airlines is subject to depositing a $30,000 performance bond since it is a public project.

The carrier expects delivery of its first aircraft mid-January 2019 by which time it expects to have made progress on the five step process towards being issued with an AOC.

“Securing the AOC is a technical process that involves the CAA reviewing and validating the applicant’s operational manuals and internal processes which define the pre-application phase,” adds the source.

In Uganda Airlines case, this will involve the scrutiny of some 19 operational manuals, operational controls, maintenance plan and conducting a type certification of the intended fleet. Because Uganda is buying directly from the manufacturer, this will be done at a state to state level with the CAA directly working with Transport Canada.

Once these formalities have been cleared and the first aircraft delivered, Uganda Airlines will then lodge a final application for an AOC and carry out a demonstration to one of its listed scheduled destinations for the CAA to make a final decision.

The source adds that the process has somewhat been held back by the absence of the five key post holders who must be in place during the certification process. This was been partially addressed after the airline put out adverts for different jobs last month.

To fast-track procurement the Ministry of Works has applied to the Public Procurement and Disposal of Public Assets Authority PPDA to give the Uganda Airlines Project special accreditation as a way of avoiding the timely delays that have been characteristic of public procurement in the past.

Procurement of aircraft which had been vested in the Ministry of Finance has been delegated back to the project team which now expects to conclude review of finance bids ahead of the January 2019 delivery of the first unit.

The team was flooded with offers for finance after it emerged that the Canada Export Credit Agency would not be financing the acquisition of Bombardier aircraft. Some bids by individuals offering ridiculously cheap money have been thrown out after the Financial Intelligence Authority suspected they were tied to dirty money.

“Some were offering very cheap money but they appeared to be more interested in securing Ugandan sovereign bonds which could then be used by them in other ways. The government of Uganda has long stopped issuing sovereign bonds so they were disqualified,” says the source.

A final choice of financier is expected on October 18, when the team sits down to review term sheets with the shortlisted candidates.

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