In the late 1980s, Uganda's major international airport at Entebbe was handling about 135,000 passengers annually, a substantial increase over the early and mid-1980s. Six scheduled airlines flew into Entebbe, one of five airports with paved runways. The national airlines, Uganda Airlines, suffered several financial setbacks, however, operating a fleet of only four outmoded and unreliable aircraft. British authorities banned the B707 aircraft from operating in Britain because of noise abatement restrictions. Uganda Airlines also reduced its European service to one flight per week to Italy and West Germany. Uganda then signed a lease agreement with Zambian Airways for a weekly flight to Britain. When this arrangement proved too expensive, a similar agreement was signed with Ghana Airways, which began operation of a DC10 flight between Entebbe and London in April 1988.

The October 1988 crash of a Uganda Airlines Boeing aircraft in Rome seriously crippled the airline's operations. That aircraft was the only one in the fleet fitted with a "hush kit" to reduce noise to European standards. Although Uganda Airlines resumed service with a leased aircraft in December 1988, the financial viability of that service remained questionable. Uganda Airlines continued to operate service to the Middle East and Nairobi in 1988, but these flights, too, were canceled in late 1989. Domestic routes, too, had been reduced to those between Entebbe and the Arua and Kasese airfields. Uganda Airlines was exploring the possibility of merging with Air Tanzania and Zambian Airways, as all three airlines sought to find ways to operate newer, larger aircraft economically but lacked the passenger and freight traffic to do so.

The government contracted with a British consulting firm, Psiair, to conduct a management study of Uganda Airlines Corporation. The 1989 Psiair report urged a complete overhaul of the airlines, citing fiscal and labor mismanagement and safety problems among the most serious concerns. By late 1989, the government was considering a policy that would require all airlines personnel to resign and reapply for their jobs, in an effort to remove "ghost employees" from the payroll and reduce nepotism among airlines management.

Data as of December 1990