Can you give us some more background information on Air Tanzania in terms of your historical background and your company structure?
Air Tanzania is a fully government owned airline, it is a parastatal organisation. It started in 1977 after the collapse of what used to be the East African Airways which was jointly owned by the government of Kenya, Uganda and Tanzania. When it collapsed, the three countries started their own airlines. Air Tanzania started with airplanes inheritted from E.A.A. which were later sold, and later the Government bought two 737s three F.27's and four Twin Otters. The airline started without too many facilities but with good workers; pilots and engineers, who were trained in East African Airways. We didn't have many tools; just aeroplanes and workers. Slowly but surely we started buying equipment, building hangers, training more people. At some stage later on when the business became tougher we had to sell some of the aeroplanes and one was involved in an accident during training and we remained with the F27s and the Boeings and we are now at a point where we remain with two 737-200 aircraft and we leased in one 737-300, one F27-500 and a Beechcraft 1900C.
The route network that we were operating was mainly comprising of domestic and regional routes which has grown a bit because we used to go to the Gulf and all the neighbouring countries; Zimbabwe, Zambia, Kenya, Uganda, South-Africa, Burundi, Rwanda and Malawi and this is still the case. We just added two more destinations; Lubumbashi, and Mauritius. We used to go to the Gulf using our own planes, the 737; but then as the years progressed, we had some other players from the Middle East; Gulf Air and Emirates coming into the market. These were very strong players and we couldn't manage to compete. They came in with wide body aeroplanes and they are owned by wealthy people so they have more money and can afford very low fares so they pushed us out of the market.
We decided to apply a new strategy and we are now exploiting the Gulf market by using Gulf Air through a joint operation. It is a code sharing arrangement. We have also exploited other opportunities by trying to negotiate code sharing arrangements with other foreign carriers, for example with Uganda Airlines, Air Zimbabwe, Air Malawi, Air Mauritius and SPA with Comair of South Africa. We are also talking to others and trying to get more arrangements. Whoever wants to cooperate with us, we will cooperate as long as we can get something out of the arrangement. We want to enhance the network of our airline so when we are eventually privatised, we shall have a network which is as wide as possible which is more value to the airline.
At what stage is your privatisation process now? When do you think you will be privatised?
We have been told by the government that Air Tanzania will have been privatised before the end of the fiscal year 2000-2001. That means it should be privatised by June 30th 2001. Maybe this statement will be modified, but at least so far that is what has been planned. It might not be realistic though, because there are so many things which have to be done if it is to be done properly. We have to do the valuation of our assets, and prepare a prospectus which has to be carried out by a consultant because we don't have the expertise in-house. Then, the evaluation has to be accepted and certified. We have to find a consultant to do these things, but this could take another one or two months. The whole process for the consultant to look for all the information they need takes a long time as well. It might take beyond next year, but I don't see it delaying too much.
What would you say are Air Tanzania's weaknesses and strengths compared to your competitors?
We have certain weaknesses which are inherent in the organisation and which are caused by our background. We are a very weak economy and we have to train people from scratch in a very expensive manner, aviation is very expensive. Training a pilot is extremely expensive, but our pilots have to have international standards. Equipment modernisation is very expensive as well and it is very difficult to get loans nowadays since we don't have necessary guarantees. These are disadvantages we are facing.
As far as our strengths are concerned, we are better placed than the other airlines in the Tanzanian environment since we have a name and longer history, our core staff are more experienced and even if a lot of people join later there is a lot of experience in the airline, in all departments from Finance to Technical to Operations to Commercial. . Our pilots and engineers are among the best in the region. This is testified by our safety record. We have had a very good safety record since inception. We just had one accident, but this was during a training session. Apart from this we have been very lucky without any disaster involving passengers. We always have tried to maintain standards. And this is a very big strength for us because our staff have been well trained. Another strength is, since we have come from a regime of national carrier, that we have the backing from the government. We have this political support. We have political stability in this country and this helps us a lot. What happens in our neighbourhood is different. The fact that we are in good terms with our neighbours makes it easy for Air Tanzania to operate without any problem in the neighbouring countries and in our own country.
| Could you give us some figures on Air Tanzania, like your number of staff and your turnover of last year?
We have about 500 staff. We had a turnover of 32 million dollars. Our costs are quite high so our profits are in the region of about one million dollars.
To what extent do you work hand in hand with the Civil Aviation Authority and how do they help you to operate here in Tanzania?
The Civil Aviation is the regulatory authority and they have recently been given a different status. They were a department of the government under the Ministry of Communications and Transport. Now, they have been given more autonomy. They are now an agency. Their role with respect to the operators like us remains the same. They are a regulatory body. They give us the services we need. They provide us with inspectors for operations, for technical issues, all the certifications for personnel facilities and the aeroplanes. They are also a link between us and other authorities. They also take care of the air traffic system which is part of our operations.
To what extent is Air Tanzania benefiting from the tourism boom here in Tanzania?
Tourism is coming up in a very fast way and we are very glad about that as a nation and also as an airline. We are working hand in hand with the Tanzania Tourist Board and also the Ministry of Natural Resources and Tourism to promote tourism. That is why we opened the route to our recent destination Mauritius. It is mainly because of tourism. We want to tap some tourists coming into Mauritius by making them come to Tanzania or making them have another stop in Tanzania. When they do that they have very easy connection with Air Tanzania from Mauritius to Dar es Salaam and vice versa. Tourism is coming up indeed. There is a remarkable increase of tourists coming in and you can really see it from the figures of the Ministry of Tourism and Natural Resources. Another indication is also the airlines that are operating. There are more coming in and you also have more domestic carriers. I think we haven't publicised Tanzania enough in the past; we have just started, but more and more is being done to that respect. The government has started a new promotion called "Destination Tanzania". This includes the Kilimanjaro Mountain, Zanzibar and wild life.
Since Air Tanzania is about to be privatised, where do you see the company within the next 3-4 years?
Air Tanzania is going to be very healthy. It has been operating in recent years under difficult conditions because of lack of adequate financing. The government has not been able to support Air Tanzania adequately and from its own resources it is also not able to generate enough money to regenerate new activities, to bring in new equipment which will help us to compete in the environment of today. When we privatise it is expected that we will get private equity into the airline. It might come from outside or within. Local investors have not been able to invest in Air Tanzania because they have not yet been given the opportunity by the government. When the government opens up the airline for privatisation we shall be able to get this private investment into the airline. We will become much more autonomous, we will be able to take decisions without any clearance needed from the government. Under such circumstances we will be able to compete much more effectively. We will stay a small airline but a much more effective one. We are going to serve the inland destinations as well as the region, for example the Arabian Subcontinent, SADC and other neighbouring countries. Whoever will come in as a strategic partner can now give us the link to the world from our region. We can service those markets using this strategic partner who has other links. Maybe he has links to the Far East, to the Americas, Europe and so forth. We could use their network and serve the whole world. They could also bring passengers into our network and feed the region. This is my vision for the future. |
