Air Tanzania

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Air Tanzania
IATA
TC		 ICAO
ATC		 Callsign
TANZANIA
Founded 1977
Hubs Julius Nyerere International Airport
Fleet size 6
Destinations
Parent company Government of Tanzania
Headquarters Flag of Tanzania Dar es Salaam, Tanzania
Key people David Mattaka (MD), (CEO)
Website: http://www.airtanzania.com/

Air Tanzania is the national airline of Tanzania, based in Dar es Salaam. Its main base is Julius Nyerere International Airport, Dar es Salaam.[1]

Contents

[edit] History

Logo of Air Tanzania Corporation
Logo of Air Tanzania Corporation

Air Tanzania Corporation was established on 10 March 1977 after the breakup of East African Airways, which had previously served the region. Flights were started from Dar-es-Salaam using Boeing 737-200s and Fokker F27s. A Twin Otter was used for regional services and flights from Kilimanjaro were started. In the mid 1990s the airline leased an Ethiopian Airlines Boeing 767 but this aircraft was too large and the airline disposed of it. Regional services were reduced in this period and the Twin Otter was also disposed of.

[edit] Privatization

The airline was originally wholly owned by the Government of Tanzania via the Air Tanzania Corporation (ATC). In February 2002, the government began the process of privatizing ATC through the Presidential Parastatal Sector Reform Commission (PSRC). Advertisements were placed in the local, regional and international media inviting potential bidders. The International Finance Corporation (IFC) acted as the Lead Advisor to the Government in this transaction.[2][3]

The Government had approved a transaction structure which included:[4]

  • Creation of a new company, Air Tanzania Company Limited (ATCL), which would be incorporated as a limited liability company, under the Companies Act to take over the operating assets, and specified rights and liabilities of ATC.
  • A second new company Air Tanzania Holding Company (ATHCO) would be created to take over the non-operating assets and all other liabilities of ATC.

The following eight airlines submitted Expressions of Interest:[4]

Of the eight, four airines carried out due diligence – South African Airways, Kenya Airways, Comair and Nationwide.

On 19 September 2002 – bid deadline date, only SAA submitted a bid. Kenya Airways and Nationwide informed the Government that they do not intend to submit bids.[3]

[edit] ATC-SAA Partnership

The Government selected South African Airways as the winning bidder. In December 2002, SAA after signing an agreement with the government purchased a 49% stake in ATC for USD 20 million; USD 10 million as the value of the shares and the remaining USD 10 million for the Capital and Training Account for financing its proposed business plan.[3]

As the strategic partner, SAA planned to create its East African hub in Dar es Salaam to form a “Golden Triangle” between Southern, Eastern and Western Africa. It also intended to replace ATC's fleet with Boeing 737-800s, 737-200s and 767-300s. It also planned to introduce regional routes, routes to the Middle East and West Africa. The government was expected to sell 10% of its current 51% stake to a private Tanzanian investor, thereby reducing the government's ownership to a non-controlling interest in ATCL.[5]

The new airline Air Tanzania Company Limited (ATCL) was launched on 31 March 2003, offering direct flights from 1 April between Johannesburg and Dar Es Salaam, but also to Zanzibar and Kilimanjaro.

Air Tanzania recorded a pre-tax loss of almost USD 7.3 million in its first year following privatisation and part ownership by South African Airways. The loss was mainly attributed to the inability to expand the network as quickly and extensively as originally planned. It had been hoped to launch services to Dubai, India and Europe, but these have been delayed as there are only Boeing 737-200s in the fleet. The development of Dar Es Salaam as an East African hub for the South African Airways alliance had also not proceeded as quickly as planned.[6]

On 31 January 2005 Air Tanzania suspended one of its few regional services: Dar es Salaam to Nairobi, following intense competition from Kenya Airways on the route. The airline did however reaffirm intentions to launch long-haul services within a year from Dar es Salaam to Dubai, London, Mumbai and Muscat.[7]

[edit] Termination of Contract

On 31st March 2006, the Government announced that it would dispose off Air Tanzania Company Limited (ATCL) following the four years of loss-making which amounted to TZS 24.7 billion.

The Tanzania Civil Aviation Authority Director General said "Air Tanzania was in a worse state than before it was taken over by SAA".

SAA blamed Tanzania's government for failing to release about USD 30m needed to implement Air Tanzania's business strategy to reverse continued losses.

On 7 September 2006, the Government bought back the 49% stake in ATCL for USD 1 million, hence officially terminating its partnership with South African Airways. The venture collapsed due to the partners' different interests in the business. [8]

[edit] Revamped ATCL

After the partnership between Air Tanzania and South African Airways officially ceased to exist, the Government took the initiative of setting aside TZS 13 billion for: completing operation code ATCL 197 instead of 083, changing revenue systems and fuel services, preparing e-ticketing and accounts systems, using a new trademark, and clearing outstanding debts.[9]

President Jakaya Kikwete appointed Mustafa Nyang`anyi, a veteran politician and diplomat Ambassador as the Board Chairman and former Parastatal Pensions Fund Director General, David Mattaka as Managing Director and Chief Executive Officer.[10]

From 1 July 2007, ATCL started using its own tickets, Number 197, recognized by the International Air Transport Association (IATA). The airline had been using a South African ticket stock, Number 083, during the partnership with South African Airways. The airline also started using electronic ticketing in compliance with the IATA resolution from mid July.[11]

The Parliamentary Committee on Economic Infrastructure expressed its concern about no funds being set aside for ATCL. According to the opposition, the airline has debts amounting to USD 4 million due to South African Airways.[12]

A Member of the Tanzanian Parliament asked the government to claim compensation from South African Airways for taking aircraft spare parts from the Air Tanzania hangar at the Kilimanjaro International Airport to South Africa.[9]

In August 2007, Air Tanzania selected the Revenue Accounting Bureau Service offered by Mercator, the airline IT solutions provider of the Emirates Airline Group. Once implemented, it will offer benefits such as: enhanced revenue through accurate billing and verification, lowered accounting costs, raised productivity and eliminated training costs.[13]

Air Tanzania was relaunched in September 2007 after the dissolution of the partnership with South African Airways. The new brand represents the company's name, Mount Kilimanjaro and the airline's international destinations. The introduction of the airline's new logo bears the image of the imposing Giraffe – Tanzania's national icon, to replace the South African Airways flag symbol.[14][15]

On 1 October 2007, the revamped Air Tanzania made its inaugural flight on the Dar es Salaam to Mwanza via Kilimanjaro route.[16]

[edit] Financial performance

Air Tanzania Financial Performance
Year Ended Passengers Flown Turnover (TZS bn) Profit/Loss Before Tax (TZS bn) Net Profit/Loss ( TZS bn) Basic EPS (p)
2000 25.5
2004 (8.7 bn)
2005 (9.3 bn)

[edit] Destinations

Air Tanzania is expected to resume the following routes[14] :

Air Tanzania codeshares with Air Zimbabwe.

[edit] Fleet

The Air Tanzania fleet includes the following aircraft (at April 2008):

Air Tanzania Fleet[17]
Aircraft Total Passengers
(First/Business/Economy)		 Routes Notes
Airbus A320-214 1
Boeing 737-200 3 102 (16/86)
Bombardier Dash 8-300 2

As of April 2008, the average age of the Air Tanzania fleet is 19.8 years ([1]).

[edit] External links

[edit] References

  1. ^ "Directory: World Airlines", Flight International, 2007-03-27, p. 67. 
  2. ^ Privatisation of Air Tanzania Corporation (ATC)
  3. ^ a b c SAA Wins ATC Divestiture Bid
  4. ^ a b PSRC Holds ATC Bidders Conference
  5. ^ ATC-SAA Partnership Sealed
  6. ^ Airliner World, March 2005
  7. ^ Airliner World, April 2005
  8. ^ ATCL,SAA officially divorced,govt says
  9. ^ a b MP wants govt compensated on ATC spares
  10. ^ Air Tanzania should do serious business
  11. ^ ATC begins to use own ticket stocks on Sunday
  12. ^ MPs want govt to adequately fund ATCL operations
  13. ^ AIR TANZANIA SELECTS MERCATOR'S OUTSOURCED REVENUE ACCOUNTING SOLUTION
  14. ^ a b Air Tanzania finally reborn with former...
  15. ^ Air Tanzania rebrands its logo and aircraft colors to revive its lost business
  16. ^ Revamped ATC makes inaugural flight to Mwanza
  17. ^ Current Fleet Details of Air Tanzania
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Members of the African Airlines Association (AFRAA)