Airbus said on Wednesday it had signed an agreement to sell two commercial passenger planes to Uganda as part of the country’s plan to revive its national airline which has been defunct for years.
The government of long-ruling President Yoweri Museveni has said restarting the national carrier will help Uganda take a slice of the region’s growing aviation business and also invigorate the service sector of the economy.
Kenya Airways, South Africa Airways and Ethiopian Airlines currently dominate the country’s air travel business.
In a statement on the memorandum of understanding signed at the Farnborough airshow in the UK, Airbus said Uganda would purchase two A330-800neo aircrafts.
An iteration of Airbus’ A330 widebody airliner, the A330-800neo features new wings and Rolls-Royce’s new generation Trent 7000 engines.
Airbus’ chief commercial officer, Eric Schulz said in the statement that the planes would “bring a range of benefits offering unrivalled efficiencies with the most modern cabin. We look forward to see the A330-800neo flying in the colours of Uganda.”
Though no funds were provided in this year’s budget for the airline, Finance Minister Matia Kasaija said the money will be paid from both domestic resources and borrowing.
“Some we are using our own money, we have already made a deposit for the other (money) we are in talks with various people to raise it,” he said.
Founded by Uganda’s former dictator Idi Amin in 1976, Uganda Airlines was liquidated in the 1990s by Museveni’s government under a broader programme to privatise troubled state firms and open up the economy to private enterprise.
Uganda has also signed a separate MoU with Canada’s Bombadier for the supply of four CRJ900 planes at the cost of $190 million.
The carriers will mainly serve on the shorter regional routes while the Airbus will serve the long haul routes.
The country is keen to expand its aviation industry, especially as it prepares to start pumping crude oil from fields in its west, a development expected drive up business traveller arrivals.
A new international airport, financed partly with UK credit, is being built near the fields, primarily to service the oil industry.
Once completed it will be the country’s second international airport after Entebbe, south of the capital Kampala, which is also being expanded with a loan from China to handle more passengers and cargo.
“This agreement demonstrates our ambition for economic growth supported by a robust aviation industry,” Ephraim Bagenda, chief executive officer of Uganda Airlines said in the statement.