Airbus inks deal to sell passenger planes to Uganda

By Elias Biryabarema

NAIROBI (Reuters) - Airbus (NYSE: AIR) 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 colors of Uganda."

Founded by Uganda's former dictator Idi Amin in 1976, Uganda Airlines was liquidated in the 1990s by Museveni's government under a broader program to privatize troubled state firms and open up the economy to private enterprise.

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 traveler 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.

(Reporting by Elias Biryabarema; Editing by Omar Mohammed and Kirsten Donovan)

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