Coronavirus: Uganda Airlines at a crossroads

Uganda Airlines is facing difficult decisions over the delivery timetable for its A330-800 neo fleet, which had been brought forward from the initial December 2020 date for the first aircraft, to October 2020.

The second aircraft would follow a month later, with launch of the first intercontinental route tentatively planned for December.

The question facing the airline now is whether to go ahead and receive the aircraft and park them at Entebbe, or postpone the deliveries.

Sources familiar with the situation say the carrier which started commercial operations six months ago, had brought forward the delivery dates after Finance Ministry frontloaded the bulk of resources required for fleet development, leaving the airline with a final payment of just $17 million on the two aircraft.

But this has also been provided for in the fiscal year that starts in July, essentially meaning that there are no pending obligations to the manufacturer.

However, the global disruptions to air travel as countries enter lockdowns in response to the Covid-19 pandemic has impacted plans for expansion of the regional route network, as well as the intercontinental destinations on which operations of the wide-body fleet were premised.

Ugandan Airlines chief executive Cornwell Muleya had not responded to our request for comment on the reports by the press time. However, Joy Kabatsi the Minister of State for Transport confirmed the dilemma.

“It is a question of cost. Not accepting the aircraft from the manufacturer means we would have to pay them for each day they stay with them beyond the contractual delivery schedule the same way they would have to pay us if they failed to deliver. On the other hand, keeping the aircraft parked on the ground in Entebbe also has its own costs. The airline management is working to arrive at the best decision,” she said.