Ugandan carrier DAS Air Cargo enters administration

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Ugandan freight carrier DAS Air Cargo has entered administration and stopped flying after a European ban on its services and a subsequent legal battle, coupled with high fuel prices, caused a dramatic downturn in its financial position.

DAS Air Cargo was established in 1983 to provide airline and ancillary services to its air operator’s certificate holder, Kampala-based Dairo Air Services. At its peak DAS Air operated six aircraft on freight services between Europe and Africa. Last year it generated over $200 million in revenues.

But following a dramatic decline in DAS Air’s financial performance, its management filed for administration on 17 September. Menzies Corporate Restructuring says two of its executives, Andrew Duncan and Andrew Stoneman, have been appointed as joint administrators.

MCR says: “A combination of events including fuel prices reaching an all-time high and an unexpected legal case – duly won – by DAS Air against a sudden ban imposed on them for operating within the European Union, saw their customer base drop and their financial performance decline dramatically.”

Duncan says that, by the time the ban was lifted, almost irreparable damage had been done to the business: “The management came to the decision that the company couldn’t continue.”

He says the leased aircraft have been returned, while the carrier’s own McDonnell Douglas DC-10-30 freighter has been taken back to the UK. Although DAS Air is no longer flying, Duncan says its staff and operation have been retained in case a refinancing package emerges.

“DAS Air has a strong pedigree and has enjoyed a market leading position for many years. The unfortunate events of last year, particularly the completely unforeseen EU ban, have, however, taken their toll,” he says.

“The EU ban has been lifted and the company is in good shape for reclaiming its position as a worldwide cargo carrier. We are working closely with the directors on a plan for taking the business forward and hope to sell the business as a going concern, thereby saving jobs and minimising disruption to the company’s customer base.”

He adds that within the next month it should become clear whether anyone is interested in acquiring DAS Air as a going concern.

DAS Air’s owners, Jo and Daisy Roy, are seeking to refinance the carrier, while some of the airline’s UK-based management have expressed an interest in acquiring the business and assets out of administration.

It is unclear whether Dairo Air Services is still operational, given the developments at its capacity-provider. Duncan says: “DAS did provide all of the aircraft for Dairo. Dairo isn’t operating at the moment, as far as I am aware, because it has no aircraft to charter out.”