AIR TANZANIA’S WOES CONTINUE
(Posted 20th November 2013)
Past sins are catching up with Air Tanzania once again as creditors are moving to have, what appears the sole asset of Air Tanzania, their head office building, auctioned off to raise the cash to pay up million dollar debts owed for many years. The Commercial Court, with an unusual lack of spine, had suggested to the creditors they seek out other assets but according to a regular aviation source in Dar es Salaam none of substance were found, leaving only the building as a collateral. The creditors have now apparently sought assistance from Tanzania’s Attorney General, a move felt my many to equally end in a dead end, as the same government keeps pouring money into the company while peddling the prospect of a phantom investor for the public to gloss over the losses ATCL has incurred over the years, some under the most dubious of circumstances like the lease of an Airbus a few years ago for which government has guaranteed a debt now thought to run in to the multi million US Dollars.
Three weeks ago were news peddled in the local Tanzanian media that a consortium from Oman had lined up a financial package of over 100 million US Dollars but nothing has come of that as yet, again having aviation pundits suggest that such a bailout may not in fact exist as no serious investor could ignore the financial troubles, huge legacy debts and mostly the strong influence of labour unions which has in the past scared off investors time and again. The appearance of FastJet on the local scene too has raised questions of how ATCL can survive such competition, which will leave the erstwhile national airline of Tanzania with limited options where to fly to as the route to Kilimanjaro and Mwanza are now operated by FastJet and Precision Air, leaving little space for an added conventional full service airline. While both FastJet and Precison Air have posted significant losses for their last financial year this will not make a full scale return to the skies over Tanzania any easier for ATCL and should the pending court cases finally turn the leaf and have their offices auctioned off, that may finally drive the last nail into the proverbial coffin of Air Tanzania. Watch this space.