East African Business Notifier

  BY PAUL TENTENA Africa’s aviation sector is entering a period of significant expansion, but access to capital remains a major constraint for airlines seeking to grow their fleets.  As demand for aircraft increases, insurance could play a critical role in giving lenders greater confidence to finance them. With Uganda, ordering about six Boeing Aircrafts to add to its Uganda Airlines fleet, which is expected to be delivered in 2032, African fleets average around 13 years of age, and most carriers grow through quality used aircraft and engines rather than factory orders.  With engine shop-visit backlogs and new-delivery delays pushing spare-engine demand and values to record levels, the EIRS approach responds to a pressing need: airlines and lessors need engines financed today, and lenders need cover to do it. “Insurance exists to turn two risks, ‘what if the plane is destroyed or seized?’ and ‘what if the airline stops paying?’, into something a bank is allowed to lend ag...