TANZANIA’S leading private carrier, Precision Air, which has been unable to raise cash from the air markets for three consecutive years, faces the risk of running out of liquidity far sooner than expected.
For the period between 2017 and 2019, the company has been losing a total of Sh. 3,068,831 per hour, one of the greatest losses in the private airline business in the country.
The company that was once known as the sky king in Tanzania, registered a total loss of Sh. 31,861,128,000 for the financial year ending in 2019.
Precision Air also recorded a wide-ranging loss to the tune of Sh. 21,545,586,000 for the financial year ending in June 2018.
And in the previous financial year ending in 2017, it registered a loss of 27,242,165,000 according to financial reports made accessed by SAUTI KUBWA.
It has come to light that the carrier transported a total of 483,766 passengers in 2019, while 474,247 passengers were on board in 2018 and 408,807 embarked Precision Air in 2017.
SAUTI KUBWA has learnt that Precision Air is undergoing cash haemorrhage at a terrifying rate, which could force it into bankruptcy within months, as it is also suffering more business loss due to the current COVID-19 pandemic, which has tremendously shaken the air transport sector.
One of the leading aviation industries experts in Tanzania, Maningu Mwakalosi, says that the carrier needs an urgent rescue to make it continue hovering the sky instead of keeping its fleets on the ground.
“Aircraft need to be in the sky. Being grounded is a big loss, and actually, they are not meant to be there,” he said, pleading for the rescue of the once giant carrier in East Africa, apart from Kenya Airways.
He said it was high time for more investors to put finance in Precision Air, as failure to do so implies that the aviation industry would soon die commercially, while the 3% of the country economy is linked to it.
Recently, SAUTI KUBWA published a story entitled “Precision Air facing prospects of shutting down business operations,” and indicated that this would happen in the first quarter of 2021 if the prevailing economic crisis didn’t change.
Our previous story further revealed that some of the company’s fleets were grounded, due to operational difficulties arising from the COVID-19 pandemic and other business constraints.
However, the company immediately refuted the report through paid and unpaid adverts in social media outlets, arguing that her fleets were operational.
A source friendly to the management told SAUTI KUBWA with authority that, as of now, two aircraft – ATR42- 600 series – are grounded due to crew flying limitations.
“Currently, two ATR42-500 series are in operation and four out of five ATR 72-500 are in operation. The 5th one – ATR66-500 – is going through an inhouse mandatory C-check,” said the source.
To Precision Air, which has been struggling to survive against all odds, this may be deemed as an achievement in capacity building on technical matters, particularly the construction of its own hanger.
The foresaid hanger has enabled the airline to embark on economic diversification through which it performs maintenance of a parking facility for up to three aircraft.
SAUTI KUBWA understands that one plane – ATR42-300 series – is grounded due to its economic age, the maintenance fees of which are higher than the revenue generated out of it.
Apart from the COVID-19 pandemic, which has caused a decline in income, there are significant and undisputed claims that the Tanzania government is pampering its Air Tanzania while squeezing Precision Air in almost every business opportunity.
The government, instead of being a business enabler, is becoming a competitor, a senior officer said.
Some insiders within the Precision Air said the refutation of the claims by the airlines’ PR manager was a face-washing action for the sake of keeping the positive image of the company.
Precision Air received the Best Domestic Scheduled Airline in Tanzania Award by the Tanzania Society of Travel Agents in 2013; received the Brand Excellence Award Airline by Tanzania Leadership Awards in 2015 and, in 2012, it received the Bronze Award in the African Airline of the Year Award awarded by African Aviation News portal.