Cost cutting programme trims Precision Air losses


(Posted 20th February 2015)

The just concluded Annual General Meeting of Precision Air, a company quoted on the Dar es Salaam Stock Exchange, was told of some progress to correct the sins of past management when on a year on year basis the company’s losses reduced by some 60 percent.

Still in the red by about 12 billion Tanzania Shillings is it however a far cry from the 30 billion TShs loss in the previous financial year.

The airline presently operates a fleet of 6 ATR 42 and 72 aircraft and is seeking further means to reduce losses by considering a sale and lease back arrangement for the planes which were bought brand new from the manufacturer.

The arrival of Fastjet two years ago has also contributed to revenue challenges on some routes with Precision Air pulling out of the initially profitable flights to Mbeya, where their competitor now flies with an Airbus A319, outcompeting the turboprops of Precision.

However have other routes contributed substantially to the improved bottom line, such as flights to Tanzania’s gas capital Mtwara and other destinations across East Africa’s largest country which can only be served by turboprop aircraft due to runway lengths and other factors.

Ms. Sauda Rajab, CEO of Precision Air, who instituted sharp cost saving measures and cut the fleet by disposing of the airline’s B737-300’s, told the shareholders that she would continue with the cost cutting measures and concentrate on serving destinations which can be operated profitably.

The route from Dar es Salaam to Nairobi and from Kilimanjaro to Nairobi are flown in code share with partner airline Kenya Airways, itself also struggling to turn the financial fortunes around. Efforts to have the Tanzanian government invest in the airline have so far not produced tangible results as the current administration appears biased in favour of Air Tanzania, the ailing national airline which has even greater losses on their books and is struggling to stay in the air.

For breaking and regular aviation news from the Eastern African region look no further but this space.

%d bloggers like this: