RwandAir, the national flag carrier of the Republic of Rwanda, has signed a memorandum of understanding for two A330 aircraft, European plane maker Airbus said on Tuesday, in a deal worth around Sh46 billion based on list prices.

RwandAir’s A330s will be delivered in the second half of 2016 and will be equipped with Rolls-Royce Trent 772B engines, Airbus said.

“Rwanda’s flagship carrier will deploy the new A330 aircraft on medium- and long-haul routes from their Kigali home base to long-haul destinations throughout Europe, the Middle East and Asia,” the division of Airbus Group said.

Rwandair is a relatively small airline when compared with other larger carriers on the continent like Kenya Airways, South African Airways and Ethiopian Airlines. The purchase by RwandAir is expected to increase competition for other airlines in the region including Kenya Airways and Ethiopian Airline which are also undergoing fleet expansion and modernisation.

Rwanda in December signed a Memorandum of Understanding with Uganda and South Sudan to establish a legal framework for negotiations that would see local airlines attaining fifth freedom along Juba-Nairobi, Nairobi-Juba routes.

By aviation terms fifth freedom means an airline has the right to carry passengers from one country to another and from that country to a third country.

The three countries signed the MoU to create a legal framework before they could negotiate with Kenya on an airspace agreement which would subsequently be signed by ministers in charge of infrastructure.

Rwanda and Kenya also signed a bilateral agreement permitting both RwandAir and Kenya Airways fifth freedom between Entebbe-Nairobi and Entebbe-Kigali route in December 2014. Under the pact between Rwanda and Kenya, RwandAir is allowed to fly from Kigali to Mombasa and pick passengers there.

The deal followed a directive by Heads of State during the eighth Northern Corridor Integration Projects summit in Nairobi, Kenya, to fast-track the harmonisation of airspace control within the region.