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- Jan 20, 2009
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26th June 2010
Air Tanzania Company Limited (ATCL)
Celtic Capital Air Corporation, which has been leasing aircraft to troubled Air Tanzania Company Limited (ATCL), has said it will seek an end to the arrangement unless the government takes serious remedial measures.
It has specifically mentioned the need to support the national flag carrier with massive injections of capital and a competent management team.
Fabian Bachrach, managing director the US-based firm, told The Guardian in an exclusive interview in Dar es Salaam yesterday that he saw no possibility of the cash-strapped ATCL surviving without a really substantial shot in the arm from the government.
Alongside capital, the government should also think of helping the company with a more serious, competent and committed management team, he said.
Since our lease agreement with them came into force, we have noticed clear problems with the airlines business and we believe that it will take a lot of effort to keep it afloat.
The company has huge debts which cannot be easily paid. Whats worse is that the debt burden keeps piling up as time goes by, he added.
According to Bachrach, ATCL currently is over USD 20 million in debt, a burden he said logically meant that the only way to save the company from total collapse was for the government to intervene with a bailout package that might include internal restructuring.
My estimation is that there could be other hefty amounts of money the airline owes to various institutions without knowing that it does, he pointed out.
The CCAC executive said earlier this year they were promised and given assurances that there would be visible progress because the government was apparently working to resolve all the problems the airline faced.
He explained that they leased one Boeing 737 to ATCL in January this year, but the airline has since defaulted on the settling of the costs stipulated in their contract.
There has been a notoriously chronic breakdown of communications between our two parties, which we are forced to believe is a result of problems with leadership on the part of ATCL, added a distraught Bachrach.
He said government officials he would not be drawn into naming have promised to help the airline make the B737s aircraft operations successful, adding: I personally am that optimistic, as the passenger load is notoriously low and the debt burden continues to accumulate.
He said although the government has promised that ATCL would be supported into running more efficiently, facts on the ground tell a different story because the airlines leased jumbo jet involved in a runway accident in Mwanza earlier this year had only 37 passengers on board when it has a capacity for over 100.
He noted that after the accident, his company was supposed to be paid insurance but it ended up getting a paltry amount the explanation being that ATCL was not honouring its insurance cover obligations.
He claimed that the government had also not honoured its obligations as stipulated under the guarantee as a condition for the lease agreement to be signed.
ATCL, which has experienced a series of crippling problems since its short-lived marriage with strategic investor South African Airline (SAA) collapsed in 2006, signed the 18-month contract with the US-based firm on January 2, this year.
The agreement came into force only days after the government rescued the airline from financial doldrums with the disbursement of a second bailout package to the tune of 4.5bn/-.
Meanwhile, Members of Parliament recently asked the government to give detailed explanation of the plans it had on the beleaguered national flag carrier after the failure of several previous attempts to breathe life into it.
The MPs said the company had operated at a loss for a long time and the nation had every right to know what the government had in mind.
SOURCE: THE GUARDIAN
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Air Tanzania Company Limited (ATCL)
Celtic Capital Air Corporation, which has been leasing aircraft to troubled Air Tanzania Company Limited (ATCL), has said it will seek an end to the arrangement unless the government takes serious remedial measures.
It has specifically mentioned the need to support the national flag carrier with massive injections of capital and a competent management team.
Fabian Bachrach, managing director the US-based firm, told The Guardian in an exclusive interview in Dar es Salaam yesterday that he saw no possibility of the cash-strapped ATCL surviving without a really substantial shot in the arm from the government.
Alongside capital, the government should also think of helping the company with a more serious, competent and committed management team, he said.
Since our lease agreement with them came into force, we have noticed clear problems with the airlines business and we believe that it will take a lot of effort to keep it afloat.
The company has huge debts which cannot be easily paid. Whats worse is that the debt burden keeps piling up as time goes by, he added.
According to Bachrach, ATCL currently is over USD 20 million in debt, a burden he said logically meant that the only way to save the company from total collapse was for the government to intervene with a bailout package that might include internal restructuring.
My estimation is that there could be other hefty amounts of money the airline owes to various institutions without knowing that it does, he pointed out.
The CCAC executive said earlier this year they were promised and given assurances that there would be visible progress because the government was apparently working to resolve all the problems the airline faced.
He explained that they leased one Boeing 737 to ATCL in January this year, but the airline has since defaulted on the settling of the costs stipulated in their contract.
There has been a notoriously chronic breakdown of communications between our two parties, which we are forced to believe is a result of problems with leadership on the part of ATCL, added a distraught Bachrach.
He said government officials he would not be drawn into naming have promised to help the airline make the B737s aircraft operations successful, adding: I personally am that optimistic, as the passenger load is notoriously low and the debt burden continues to accumulate.
He said although the government has promised that ATCL would be supported into running more efficiently, facts on the ground tell a different story because the airlines leased jumbo jet involved in a runway accident in Mwanza earlier this year had only 37 passengers on board when it has a capacity for over 100.
He noted that after the accident, his company was supposed to be paid insurance but it ended up getting a paltry amount the explanation being that ATCL was not honouring its insurance cover obligations.
He claimed that the government had also not honoured its obligations as stipulated under the guarantee as a condition for the lease agreement to be signed.
ATCL, which has experienced a series of crippling problems since its short-lived marriage with strategic investor South African Airline (SAA) collapsed in 2006, signed the 18-month contract with the US-based firm on January 2, this year.
The agreement came into force only days after the government rescued the airline from financial doldrums with the disbursement of a second bailout package to the tune of 4.5bn/-.
Meanwhile, Members of Parliament recently asked the government to give detailed explanation of the plans it had on the beleaguered national flag carrier after the failure of several previous attempts to breathe life into it.
The MPs said the company had operated at a loss for a long time and the nation had every right to know what the government had in mind.
SOURCE: THE GUARDIAN
Alerts | Contact us | Lokopromo
