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RwandAir granted US$160mn to buy new aircraft

RwandAir will look at scheduling more flights to Europe, to promote tourism. (Image source: AndrewWSieber/Flickr)

Rwanda’s commercial airline RwandAir has been granted an additional US$160mn facility from the Preferential Trade Area Bank (PTA) for the purchase of new aircraft

The entire purchase order is expected to cost US$500mn. Two new aircraft – Airbus A330-200 and Airbus A330-300, both fitted with Rolls-Royce Trent 772 B engines are expected to be delivered in mid-2016, increasing the carrier's fleet to eight.

The Rwandan government, which owns a 99 per cent share in the airline, is expected to seek the deficit from other sources.

Currently, the airline serves mostly the African markets with key destinations being Johannesburg, Nairobi, Lagos and Accra. Outside Africa, RwandAir has some weekly flights to Dubai. The new A330 will be deployed on the long-haul Western Europe, Middle Eastern and Asian destinations.

RwandAir CEO John Mirenge said, “New aircraft will increase capacity for the Dubai route even as we target the European markets where most of our tourists come from.”

RwandAir has an existing US$60mn facility with the PTA Bank and is expected to use the recent funding to boost its competitiveness in the African airline market. The company faces stiff competition from bigger and more established airlines such as Kenya Airways and Ethiopia Airlines as well as FlyDubai, a low-cost airline on the Kigali-Nairobi-Dubai route.

In a bid to shore up its fortunes in the regional market, RwandaAir plans to launch a Boeing 787 in 2017.

The government has been increasing funds for the airline in recent years to help repay outstanding loans. In the 2013-14 financial year, allocation went up to US$42.7mn from US$32.3mn the previous year.

Mwangi Mumero