Tanzania: More efforts needed for national carrier to take off, says CEO

By Abdul Halim, in Dar es Salaam
Posted on Thursday, 8 September 2022 12:52

Air Tanzania (photo twitter: @AirTanzania)

Six years after the beginning of an initiative to revitalise Air Tanzania (ATCL) the country’s national carrier has come a long way, yet more progress is required to get the loss-maker off the ground.

In 2016, the Tanzanian government under former President John Magufuli initiated a new push to revive ATCL by acquiring additional aircraft from Bombardier and Boeing, aiming to boost tourism, trade and investment.

“The government has been making evaluations on the operations of ATCL and I think time has changed so Air Tanzania is supposed to change depending on the market situation,” Air Tanzania CEO Ladslaus Matindi tells The Africa Report.

Facing stiff competition from three far more dominant carriers in Ethiopia Airlines, RwandAir, and Kenya Airways, the Tanzanian airline has planned to increase its fleet from 11 to 14 planes this year and operate more long-haul and regional flights, including to West Africa.

“We have to look at how we can operate the business,” Matindi says. “We want to enhance our services in various Africa and International destinations … we want to start with Accra and Abuja.”

ATCL does not own flights, the flights are owned by the government via its flight agency, TGFA. So we cannot control flights, we are just doing business.

ATCL currently flies 13 local routes and operates 10 flights to international destinations, including Nairobi, Kampala, Bujumbura, Lusaka, Comoro, Lubumbashi and China’s Guangzhou – the latter since 17 July 2022.

Still in the red

Air Tanzania slashed its losses almost by half to TSh36.5bn (around $15.6m) in the 2021/2022 financial year, down from TSh60bn in the year before. The airline, however, is still unable to pay off its short-term debts.

“Since the start of reviving Air Tanzania, the company has inherited large amounts of debts and the government started paying it immediately,” Matindi says. “Up till now, we have paid more than 59% of debts, we are working hard to make sure we pay all debts and start making profit,” he adds, without providing a timeline.

Last year, Tanzania’s Chief Controller and Auditor General, Charles Kichere, attributed part of ATCL’s losses up to the operation costs of Boeing-B787 that exceeded its revenue, resulting in TSh23.6bn worth of losses.

“ATCL does not own flights, the flights are owned by the government via its flight agency, TGFA. So we cannot control flights, we are just doing business,” Matindi adds.

A report released by the Tanzanian parliament’s investment committee this month has urged the government to speed up the process of transferring ownership of the planes to ATCL.

“This ownership transfer will help Air Tanzania to get rid of negative capital and expensive leasing. Maybe later the company may start making profit,” MP Jerry Silaa told reporters in Dodoma.

More tweaks

Edson Lubua, an economist at the Institute of Accountancy Arusha, says some steps must be taken to pre-empt a possible decline of ATCL.

“Many Tanzanians don’t use air transport and this has to be taken seriously by ATCL and the government,” he says. “They must look at fares to attract a large number of locals.

Tanzania is a touristic nation and air transport is like a facilitating tool for the tourism sector,” Lubua adds. “Large number of tourists are coming to Tanzania from US, UK, China, India, France, Egypt, Israel, and Russia so it’s up to ATCL management to take this as an opportunity.”

Meanwhile, Tanzania has been expanding its airport capacity in recent years, having inaugurated Terminal III of Julius Nyerere International Airport in Dar es Salaam’s commercial hub in 2019. The government has also approved the construction of Chato Airport in north-west town of Geita, and another airport in the administrative capital, Dodoma.

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