Precision Air to undergo severe cost cuts to return airline to profitability


(Posted 08th September 2013)

Precision Air’s management and board have outlined measures aimed at reversing the record financial loss of around 30 billion Tanzania Shillings by embarking on the road of sharp cost cutting which may see as many as 20 percent of the work force being made redundant.

The restructuring, already announced weeks ago and reported here at the time, was apparently reaffirmed and endorsed by the board and has already resulted in a reduction of overheads by almost a third. International routes served in the past with leased B737-300 aircraft have all been suspended, like Lubumbashi and Lusaka, while it appears that the Tanzania Civil Aviation has taken Precision’s designated carrier status for the Johannesburg route back and handed it to FastJet which will on 27th September commence operations with three flights a week using their Airbus A319 aircraft.

Precision Air, according to sources close to the airline, will meanwhile assess all their domestic routes and where demand exists add more flights to destinations within Tanzania while still eyeing new opportunities like Pemba.

Towards that end will their fleet of ATR 42 and ATR 72 aircraft allow them to operate into some of the fields now being modernized by the Tanzania Airport Authority but unsuitable for jet aircraft. ‘I don’t think they will want to get back into jet operations any time soon. That was Kioko’s dream and it turned into a financial nightmare for them. Their partnership with Kenya Airways should allow them to effectively offer destinations beyond their present route network but of course via Nairobi. For now they surely must concentrate on solving their problems to get a handle on their cost which has ballooned over the past 2 years. Once they have that sorted out they will be out of turbulence’ contributed the Dar es Salaam based aviation source. Watch this space for breaking and regular news from Eastern Africa’s vibrant aviation scene.

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