State owned Uganda Air Cargo Corporation (UACC), is seeking to acquire an A330F and a mid-life 777 as part of a US$266 million resuscitation plan that will also see the purchase of 737 Combi and a 737-800 in the near term. The funds will be spent over five financial years with the first installment expected to come this July.
Details of the planned purchases are revealed the carrier’s five-year “Business Strategy and Investment Plan (BSIP)” that was signed off by the Board in January. Officials say given the limited range of the C-130, the upgrade to jet powered aircraft, is necessary for the operator to tap into opportunities in the global cargo market, which has shown remarkable resilience during the Covid-19 pandemic.
According to the plan, the cargo operator will receive a US$103 million injection in the financial year that starts July 1, 2022. The funds will, among others, be used to purchase a mid-life Boeing 737-400 (COMBI), a Boeing 737-800F and an Airbus 330F. The 737’s will be used for regional cargo distribution while the A330 and later 777 will form the backbone of long-haul operations.
Part of the money will also be used to complete the purchase of a second C-130, and finance repairs for a return to service of the Harbin Y12 fleet. The company also plans to retire all trade debt and shore up the working capital.
Another tranche of US$110 million will become available starting fiscal 2023/24, will be used to purchase an Ilyushin IL-76M freighter. The Ilyushin is aimed the market for oversize cargo, particularly for the defense ministry.
UACC also plans to purchase of a Cessna 350 light passenger aircraft, construct an aircraft hangar, a warehouse and cold storage facilities using US$23 million that will become available during fiscal 2024/25.
The final release of US$30million due in fiscal 25/26 will be used to acquire a midlife Boeing 777F. The operator is evaluating a direct purchase or finance lease.
“Please note that according to UACC BSIP, various options of funding were evaluated, but 100 percent government of Uganda support or investment in UACC has the best ROI, payback period and NPV simulations,” a source familiar with the plans told AirInsight.
In preparation for the revamp, UACC last month applied for renewal of its non-scheduled passenger and cargo operations license. The passenger service will focus on domestic and regional charters using the Cessna 350 and the pair of Harbin Y12’s.