Skip to main content

State considers Precision Air bailout appeal

Precision Air's ATR72-212A
The Tanzanian government is considering whether to bail out cash-strapped Precision Air (PW), The Citizen reports.

PW, which was once Tanzania’s fastest growing airline, is struggling under a huge debt burden and has sought a $32 million (about Sh51.2 billion) bailout package from various sources, including the government, to enable it to meet urgent financial obligations, including servicing bank loans and paying aircraft suppliers.

The government, through the Transport ministry, formed a committee last month to look into the airline’s request for financial assistance, according to reliable sources.

The committee met from July 24 to August 4 in Bagamoyo to assess the ailing carrier’s debts and operations and handed over its report to Transport minister Harrison Mwakyembe on August 7.

“We met in Bagamoyo with a view to establishing how PW came to find itself with such huge debts…we also sought to know whether PW could be helped and if it could repay any loan advanced to it,” said a source who did not want to be named for protocol reasons.

“We came to the conclusion that the company needs to be bailed out because of its contribution to the economy,” he said.
Members of the committee were drawn from the Tanzania Investment Centre, Bank of Tanzania, Consolidated Holdings Corporation, Tanzania Civil Aviation Authority, Attorney General’s Chambers and Transport ministry.

The committee interviewed various stakeholders, including Tanzania Revenue Authority and Tanzania Airport Authority officials as it weighed the pros and cons of bailing PW out.

Transport deputy minister Charles Tizeba declined to comment on the matter.
“I’m not ready to reveal information about a private company. Talk to the owner if you want to know what was discussed,” he said.

In another development, the PW management has undertaken a forensic audit as part of efforts to find a solution to problems bedevilling the company.
PW board chairman Michael Shirima told The Citizen that only after audit findings are ready would the management consider legal measures against those suspected of running the company down.
He linked the carrier’s former Kenyan CEO Alfonse Kioko, who left the company early this year, to problems the airline was facing.

“He (Kioko) deserves credit for steering the airline during a long transition period, but he had some weaknesses which are to blame for the problems we are now encountering,” he said. Mr Shirima cited as an example the ambitious expansion plan that saw the airline lease three Boeing 737 jets to fly to new destinations in Africa, adding that the decision did not take into account the risks involved.

“He should have come up with a realistic expansion plan so as to mitigate the risks.”

Reached for comment, Mr Kioko said that he was ready for any investigation and was looking forward to the forensic audit report.

“Let me clarify that the leasing of aircraft and opening of new routes is a major decision that cannot be made by a single individual…in fact, it cannot be done without the board’s approval,” he said, adding that he would eventually be vindicated.

According to Mr Kioko, the process of leasing a plane requires the company to draw a strategic business plan, which the management deliberates and fine-tunes before it is presented to the board for comments or approval.

“When your plan is approved, this forms a roadmap for the next five to ten years. It may change depending on market dynamics. We did all that during my days at PW,” he said.

“Even with this approval, when the time comes for lease, you still have to go back to the board with a clear business plan again showing the routes to be operated and revenues and operational costs as well as profitability forecasts.”

He said that in any business, and especially in air transport, market dynamics may change fast and that it makes good business sense to adjust business plan and operations accordingly.

“Here I must confess that of all the good things the good Lord bestowed upon me, He unfortunately denied me the ability to predict the future with a lot of certainty,” he said

Mr Kioko became Precision Air CEO as one of the pre-conditions set by Kenya Airways when it bought shares in the airline a decade ago. Another post taken over by a Kenyan was Chief Finance Officer.


SOURCE : thecitizen.co.tz

Comments

Most Viewed Posts

Job Opportunities at Air Tanzania (ATCL)

VACANCIES ANNOUNCEMENT Air Tanzania Company Limited (ATCL) is in the process of revamping its operations and has introduced new equipment to its fleet. The Company is therefore inviting applications from qualified personnel to fill various positions.
1.      POSITIONS: 
1.1. Dash 8 – Q400 Mechanical and Avionics Certifying Engineers (6 POSTS) 
   a)    Qualifications·         ·Must possess a valid Aircraft Maintenance Engineers License (ICAO TYPE II).  ·        ·Must possess a valid Dash 8 – Q400 Approval/License.·Must have successfully completed Dash 8 – Q400 type course from an Approved Training Organisation.       ·Must have Aircraft Maintenance working experience, as a certifying engineer, of not less than 5 years; 2 of which being on Dash 8 – Q400. Experience must include release to service certification after “A” Check and above.       ·Computer literacy·        ·Fluency in English·        ·Possession of Dash 8-Q300 Approval/License will be an added advantage.

   b)    Duties and res…

Job Opportunities at Air Tanzania: Pilots-in-Command, Co-Pilots,Aircraft Maintenance Engineers and Cabin Crews.

Air Tanzania Company Limited (ATCL) is in the process of revamping its operations and has introduced new equipment to its fleet. The Company is therefore inviting application from qualified personnel to fill various positions.
1. POSITIONS: 1.1 Pilot-in-Command – Dash 8 (11 Posts) a) Qualifications: Must possess Airline Transport Pilot License (ATPL) and with performance “A”.Must additionally achieve the following:- ·Minimum of 4000 hours flying experience of which 2000 hours must be command on multi-engine aircraft; Above 17 ton. ·Group 1 endorsement on DASH 8 or Equivalent with a minimum of 500 hours command on type; ·Pass an oral interview and flying acceptance check conducted by the Company; ·Must pass a Base and Route check with an Instrument Rating within 10 and 70 hours respectively; ·Track record of good performance as a Commander and no accident record.
b) Duties and responsibilities: ·To command the aircraft with due regard for safety and comfort of passengers at all times. ·To maintain…

Job Vacancy At Precision Air - Cabin Crews (10-Posts)

JOB VACANCY Precision Air Services Plc is a fast growing private Tanzanian airline which operates in Partnership with Kenya Airways, with its strategies to expand wings beyond East Africa and Africa.
In order to keep our services at a higher level and meet our customers’ maximum satisfaction We wish to invite applications from suitably qualified candidates to fill in this challenging position.
POSITION:          CABIN CREWS(10-POSTS) REPORTS TO:     CHIEF CABIN CREW DUTY STATION: DAR ES SALAAM ROLE PURPOSE OF THE STATEMENT
You will be reporting to Chief Cabin Crew/Assistants Chief Cabin Crew - P