How Airbus lost Uganda Airlines widebody order to rival Boeing

July 18, 2024 in Business, Companies, Trade & Industry, Transport, Travel & Tourism by Editor

Michael Wakabi

An engine monopoly by Rolls-Royce on the Airbus A330 and A350, cost European air framer Airbus a follow-on order from Uganda Airlines, allowing rival Boeing, to worm its way back to a customer it lost when Uganda decided to restart its flag carrier back in 2016.

Instead, Uganda is negotiating with Airbus to purchase A320’s for its medium haul needs, while tilting towards Boeing for additional widebodies. The Ugandan carrier operates a pair of A330-800s and four Mitsubishi CRJ-900s.

Surprising news emerged April, that Uganda had agreed to a purchase of a pair of B787 Dreamliners, and B777F and 737-800F freighters. This followed a meeting between Boeing executives and Ugandan leader Yoweri Museveni, in Entebbe, Uganda.

Now, sources familiar with the procurement reveal that the primary reason for ditching additional Airbus widebodies was down to Kampala believing it was not getting the best terms from Rolls-Royce for the Trent 7000 engines that power the A330neo. Uganda Airlines signed to a TOTAL care package with Rolls-Royce on the sidelines of the Dubai Airshow in November 2022. However, there is a growing feeling within the company, that it is not getting the best terms because there is no alternative to the Trent 7000 on the A330-800. Similar logic would apply to the A350, which is also solely powered by Rolls-Royce.

“The primary reason for the tilt to Boeing, was the availability of engine choice on the 787,” a source told 256BN.

Airbus offered earlier delivery slots, but engine choice was compelling. “I can get an A330 earlier than a 787 if I ordered now but the primary reason is engine choice,” says a source. The A330 was available from 2028, while the 787 would come in 2031 at the earliest.

Leasing is under consideration to get both the A320s and 787s earlier. “We are in talks with potential suppliers,” says an official.

Depending on shareholder approval, the first A320 could arrive as early as mid-2025 because there are lessors with open delivery slots. The leases will be funded from cashflow.

“The existing fleet, which is unencumbered by debt, can generate sufficient cashflow to support lease payments for up to three aircraft,” says another source.

While four A320’s are under consideration, the immediate need is for two aircraft. Uganda Airlines entered a short-term ACMI lease for one A320 with South Africa based Global Aviation in May. Meanwhile, plans for the B777 freighter have been dropped.