Uganda Airlines likely to miss Spirit A320neo delivery slots

April 11, 2024 in Business, Companies, Transport, Travel & Tourism by Editor

Elgon, the Uganda Airlines A330-800 at the gate at Lagos Murtala Muhammad, on October 19, 2023

A decision by Florida based US low-cost carrier Spirit Airlines, to defer deliveries of 41 of the 123 Airbus A320neo it has on order with the European airframer, opens up a near-term opportunity for flag carrier Uganda Airlines, to introduce the A320neo into its fleet as early July 2025. However, bureaucratic foot-dragging and budget constraints could see the opportunity pass by.

According to the US aviation press, Spirit is amending its agreements with Airbus to move some deliveries from the 2025-26 timeframe, to 2030-31.  The move which also involves the furloughing of some 260 pilots comes as the low-cost carrier tries to inject liquidity into her balance sheet.

Uganda Airlines, which has been grappling with a middle-of-the-market gap in its fleet, has over the past two years held exploratory talks with Airbus and Boeing, to supply a solution. Besides price, delivery slots were considered a key determinant and that led the carrier, which currently owns a pair of A330-800s and four Bombardier CRJ-900s, to consider multiple fleet configurations, which include operating a mixed Airbus- Boeing fleet.

However, little progress has been made towards concluding a deal for either the A320neo or Boeing 737Max families.

Faced with pressure which includes weight limitations on some key routes operated by the CRJ and schedule disruptions during peak season, Uganda Airlines has opted for an interim lease solution.  A deal to wet-lease a baseline A320-200 was recently concluded with Johannesburg based lessor Global Airlines.

Mr. Bageya Waiswa, the permanent secretary at the Ministry of Works and Transport, declined to supply comment for this story. But 256BN has learned that the ACMI lease, which will run seasonally for one year starting this month, involves a 35-year-old example of one of Global Airlines A320s. The aircraft will be coming in and out of Uganda depending on demand.

Teams from Uganda Airlines and the Uganda Civil Aviation Authority completed inspections of the aircraft early February, but commencement was deferred because at the time, the agreements had not been given the green light by the Solicitor General’s chambers.

Uganda Airlines has defined its needs as an aircraft that besides seating between the 76 CRJ and the 258 seat A330, would also be capable of substituting the widebody on medium haul routes.

Although the action by Spirit will immediately open up delivery slots for 17 A320neos and 24 A321neos, there is no indication that Uganda Airlines which, hit a stalemate with Airbus over pricing last year, will reopen talks. The bad press which has surrounded what are increasingly looking like systemic safety lapses at Boeing, also raise doubts about Uganda committing to the max.

Despite the likely availability of delivery slots, the Uganda government, which is juggling a shrinking resource envelop and mounting debt, would need to make some tough tradeoffs before funding the long-overdue acquisition a mid-range fleet for her national carrier.

The real choice is between foregoing the growth of the airline which has pending route launches to Guangzhou, London, Jeddah-Riyadh among other routes, and the opportunities it holds, and putting the resources into other areas of the economy.

Uganda Airlines management were not immediately available to offer comment but according to its financial report for fiscal 2022/2023, the airline carried slightly over 0.3 million passengers and grossed USD 63 million in revenues. The carrier reports that it is now able to fund 66 percent of its expenditure from own revenues but faces revenue repatriation challenges from a couple of markets.