Africa
Bombardier
Canadair Regional Jet
Jean-Paul Boutibou
Kampala
Middle East
Schulz
Treasury
Uganda
Uganda Airlines

Uganda takes to the skies with ‘unwanted’ Airbus

“We are delighted to welcome Uganda Airlines among our A330 Neo customers. The A330 Neo will bring a range of benefits, offering unrivalled efficiency combined with the most modern cabin. We look forward to seeing the A330-800 Neo flying in the colours of Uganda,” said Mr Schulz.

For Uganda, the delivery of the two aircraft may not be earlier than 2020, given that the plane is still in its development stage, putting its trans-continental plans as a future prospect.

Uganda Airlines also placed a firm order for four Canadair Regional Jet 900 series (CRJ 900), rounding its plane orders to $776 million, and making the strongest expression of intent yet in the three years since Kampala announced plans to revive a national airline it grounded in 2001.

“We congratulate Uganda for the revival of its national flag carrier, and are thrilled that the new airline has selected Bombardier and the CRJ900 regional jets for its upcoming debut. We look forward to supporting the development of Uganda’s regional air travel with these jets,” said Jean-Paul Boutibou, vice-president of sales for Middle East and Africa at Bombardier Commercial Aircraft.

Uganda Airlines, which will be buying the A330s at $293 million apiece, has asked its sole shareholder, the government, to commit $70 million from the Treasury in four tranches over the next three years.

“Leases available for short-term durations are ‘wet leases’ (leasing both the aircraft and crew), which are very expensive, with structures involving extensive ‘return condition’ provisions,” the project team said, adding that dry aircraft leases tend to be available for secondhand aircraft, with lease tenures of at least five years.

On the other hand, leases for new aircraft are available for tenures starting from seven years or longer. The team reasoned that the costs associated with long-term leases “would put a strain on cash flows and inhibit the growth of the national airline.

“The Business and Implementation Plan recommends that the core fleet to be used on the regional and international networks should be purchased to allow for the accumulation of equity into the airline, as opposed to leasing, which works for the advantage of aircraft lessors,” the team said.

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