PRECISION AIR SUFFERS SIGNIFICANT LOSSES
(Posted 14th September 2015)
Similar to major shareholder Kenya Airways has Tanzania’s Precision Air also suffered major losses in the just ended financial year 2014/15.
If details from Tanzania are to be believed, sent in by a regular aviation source from another local airline, have the losses reached a staggering 83.9 billion Tanzania Shillings, down from last year’s loss of just 12 billion Tanzania Shillings. Even more significant appears the reduction in revenues, which shrank from 141.2 billion Tanzania Shillings last year by some 25 percent to now only 105.4 billion Tanzania Shillings, suggesting a sharpish fall in passenger and cargo volumes.
Precision, like in fact all other Tanzanian jet airlines, including Fastjet and of course loss leader Air Tanzania, have been struggling to turn profits for the past few years. Fastjet, with the now largest passenger number uplifted for domestic and continental flights out of Dar es Salaam, too is still in the red and while progress has been made towards turning a black bottom line is this taking longer than anticipated.
Precision, besides serving Kilimanjaro and Mwanza, has turned to secondary routes like Mtwara to use their fleet of ATR 42 and ATR 72 aircraft after being unable to compete on the route to Mbeya, which is now exclusively served by Airbus A319 jet aircraft from Fastjet.
Several aviation pundits in recent weeks, seeing these results coming, have advocated for the new Tanzanian government to ditch the current Air Tanzania and either merge the moribund national airline with or engage with Precision Air to form a new national carrier. Otherwise there is a real chance that the country will see both airlines go under, Air Tanzania anyway only kept alive by regular major cash injections and bailouts.
A source close to Fastjet said that considering their recent upping of flights to now daily services to Johannesburg and combined Lusaka / Harare, and having become the dominant airline on the route to Mwanza, Kilimanjaro and Mbeya, it is only a matter of time before the operation turns profitable. ‘Their load factors are persistently high, their fares when booking late coming to the same as the others charge, so there is all reason to turn the page this year. If they could get landing rights to Nairobi they would clean out that market also but those are politics, even in the age of East African Community’.
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