Government commissions study into Air Tanzania's revamp

Air Tanzania (TC, Dar es Salaam) owner, the Tanzanian government, could replace the debt-stricken national carrier with a new company which, it says, should be professionally run.

The Tanzanian Daily News reports the country's Parliamentary Public Accounts Committee (PAC) directed the Treasury Registrar to prepare a feasibility study to either revamp the Air Tanzania Company Ltd (ATCL) or to establish a new national airline. The report is due by June.

"The new national flag carrier or the improved ATCL will be co-owned by the Tanzania National Parks (TANAPA) and the Ngorongoro National Parks who will be made strategic investors and exempted from paying taxes," the Ministry of Natural Resources and Tourism and the Treasury Registrar, Zitto Kabwe, said.

The quintessential government-run airline, Air Tanzania has long suffered from poor management, over-staffing, and undercapitalization resulting in a decade of hefty annual losses.

There is hope on the horizon, however, as according to Air Tanzania's Board Chairman Salim Msoma, a recovery strategy for the airline has already been devised.

But, any recovery of the airline is contingent on the airline's TZS93billion (USD50.8 million) in outstanding debt being settled. Last year, Minister for Transport Dr Harrison Mwakyembe, whose portfolio oversees the airline, warned the Tanzanian parliament that discussions with investors can only begin once government has assumed Air Tanzania's debt; a move it has been reluctant to undertake.

Among the entities that have expressed an interest in a revamped Air Tanzania include JoyAir (JR, Xi'an Xianyang), Emirates (EK, Dubai International), Turkish Airlines (TK, Istanbul Airport), and the mysterious Oman-based firm Al Hayat Development and Investment LLC, which has proposed a USD100million investment in the carrier.

Currently, Air Tanzania operates a CRJ100, leased from CemAir (5Z, Johannesburg O.R. Tambo), a CRJ200 leased from Trident Aviation (Nairobi Wilson), and a Dash 8-300 on flights throughout the country as well as to the Comoros and Burundi. Plans are afoot to acquire two Dash 8-400s as well as an E170 and an E190 from Embraer (EMB, São José dos Campos Professor Urbano Ernesto Stumpf) though this has yet to be corroborated by the Brazilians.