Bombardier troubled, but Uganda keeps the faith

Wednesday December 5 2018

Inside the Bombadier Q400

Inside the Bombadier Q400. The Canadian aircraft manufacturer is left with only two thin aircraft programmes. FILE PHOTO | NMG 

By MICHAEL WAKABI
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Uganda Airlines does not see any imminent risk in its choice of Bombardier’s CRJ as the mainstay of its regional fleet, as questions mount over the Canadian aircraft manufacturer’s future in the global aerospace industry.

Bombardier, which is laying off 5,000 workers and redeploying the rest to its rail and aero structures subsidiaries, is left with only two thin aircraft programmes.

The future of the CRJ, of which Uganda Airlines has ordered four units, became the subject of intense discussion by analysts earlier this month, after Bombardier sold its Q400 turbo-prop programme to Viking Air for $300 million.

This followed the completion of a non-cash transfer of a majority stake in its groundbreaking C-Series to Airbus in July this year.

That left the business aircraft division and the CRJ line as its only footholds in commercial aviation.

However, with a shrinking backlog of deliveries that stands at about 50 units for the CRJ, analysts wonder if the remaining business can sustain the engineering resources required of an aerospace organisation.

Ephraim Bagenda, chief executive of Uganda Airlines, said he has not been officially notified that Bombardier is going out of business but, even if they were, the aircraft type would still have adequate technical support.

Mr Bagenda declined to comment further about Bombardier or other aspects of Uganda Airlines, but commentators say with slightly more than 1,400 CRJs in service, the programme is likely to attract a buyer keen on using that customer base as a stepping stone into commercial aviation.

Japanese comeback aircraft manufacturer Mitsubishi, which is still in the process of certifying its Mitsubishi Regional Jet, is seen as a potential candidate, while Brazilian rival Embraer has already said it sees no value in taking over the CRJ.

Uganda’s acquisition of the CRJ, whose initial delivery was scheduled for January 2019, has been beset by a financial rollercoaster.

Canada’s Export Credit Agency, which had been expected to finance Uganda’s aircraft purchases, inexplicably pulled out mid-this year.

Although no explanation has been offered for the change of heart, sources in Uganda believe it was tied to an ongoing internal review at the agency after it lost track of an aircraft it financed for the South Africa-based Gupta family.

Sources say Kampala has so far deposited 35 per cent of the purchase price for the CRJs, but, because it wants to have a title to the properties, it is seeking finance from sources that can accept those terms.

Uganda’s April 2019 timeline for launch of commercial air services remains unchanged.

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