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ROARING AHEAD: PRECISION AIR's RAGS TO RICHES STORY

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by ByaseL, Mar 29, 2010.

  1. B

    ByaseL JF-Expert Member

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    Mar 29, 2010
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    Precision Air Services Ltd is an entrepreneurial brilliance at its high point. The airline known as PW in IATA two letter codes is going places! Precision Air’s rags to riches story is the envy of East Africa aviation if not beyond. I, for example, cannot recall any airline in East Africa which came from a very humble background to grow into a formidable airline player and survive for a very long time like PW. Take for example, Regional Air of Kenya, partly owned by a once powerful and affluent former minister Nicholas Biwott. This airline was at one time doing so well to the extent of even securing a franchise agreement from British Airways but could not thrive in a fiercely competitive environment in Kenya aviation industry and folded not long ago. Same goes for DAS Air Cargo owned by a flamboyant Ugandan couple Mr. and Mrs. Roy. From a small cargo airline outfit, DAS Air Cargo rose to claim Africa’s number one cargo airline until it was uncovered trying to cut corners on key aircraft maintenance programs by the European Union (EU) and was banned from flying into Europe. DAS Air tried to comply with EU requirements but the damage was too much to recover and in 2007 the airline caved in.

    Precision Air Services is a brainchild of a very illustrious aviator, Mr. Michael Shirima. Mr. Shirima is a man with visionary ideas. He quit his job as Director of Operations in the formative stages of Air Tanzania Corporation (ATC) in the 1970s to start his small airline outfit based at Kilimanjaro International Airport to deal mainly in aerial spraying and later ventured into air charter operations using a Cesna 402 aircraft particularly in the national parks and game reserves. Gradually, Precision Air diversified its services as a scheduled airline but mainly in tertiary markets like Arusha/Kilimanjaro-Zanzibar-Dar Es Salaam. As it gradually consolidated its market position and through exploitation of Air Tanzania’s weaknesses, Precision Air went full throttle to take the national airline head-on in key markets.

    In 2000 South African Airways (SAA) took note of PW’s potential and made some advances to Mr. Shirima to have a stake in his airline but this initiative fell through. In 2003 when it became obvious that SAA was going to be a winner in the privatization of Air Tanzania Corporation, Kenya Airways (KQ) withdrew its bid at the eleventh hour and quickly charmed its way into suitor-ship of PW which culminated into KQ taking a “minority” 49% shareholding in PW. Since then there has been no looking back for Mr. Shirima’s pet project. Kenya Airways took over management of the airline and gave it new impetus which has seen PW become a leading aviation powerhouse in Tanzania in terms of market share. Statistics indicate that PW is now controlling about 65 % of the domestic market (amongst first tier airlines) while ATCL plays second fiddle at 35%.

    With the recent acquisition of a brand new ATR 42-500 aircraft PW has done it again. This makes PW’s fleet of ATR model to seven aircraft plus one B737-300 which is used on the Dar Es Salaam-Mwanza route and Dar Es Salaam-Nairobi on a code shared flights with KQ. PW’s competitor ATCL has a fleet of two Dash 8 aircraft and B737-200 which was crippled recently while landing at Mwanza Airport. Compared to ATCL/SAA ill-fated tie-up, Precision Air’s partnership with Kenya Airways has gone much better except for a few misgivings here and there.

    Firstly, PW flights on the Dar ES Salaam-Johannesburg route were started with great hope but only lasted for a brief period because apparently PW could not take the heat in the marketplace and had to quit. Even after the suspension of ATCL flights to Johannesburg in November 2008, PW has missed the opportunity to fill the void, leaving SAA a virtual monopoly player on this lucrative route. With KQ’s synergies, PW was expected to bring a formidable challenge on this route for the benefit of the traveling public.

    Secondly, there is a strong perception that despite Mr. Shirima being the Non-Executive Chairman of Precision Air, the airline is not under effective control of Tanzanians as per the spirit of the Chigaco Convention of 1944 on airlines. It is alleged that all key decisions regarding PW emanate from Nairobi and therefore for a foreseeable future the airline will basically remain an appendage of Kenya Airways as purely a feeder airline of KQ at its Nairobi hub.

    Thirdly, even with a superior fleet PW is still grappling with maintaining its schedule integrity. PW is very notorious at changing its schedules at short notice and this is a nagging problem that needs fixing lest it tarnishes the generally positive public image of the airline.

    Having said that, credit must be given to PW for coming this far from a very modest beginning. Obviously there has been some challenges along they way but PW has stood a test of time both as an airline and a corporate entity. To put some icing on the cake, in 2008 Precision Air Services Ltd was voted as the most respected company in Tanzania in yearly joint survey by Price Cooper Waterhouse and the Nations Group of Kenya. This is not a mean achievement given the competitive corporate environment obtaining in the country with the likes of Tigo, Vodacom, Tanzania Breweries, et cetera, who are on the cutting edge of technological innovation and customer service delivery.

    With the coming of the fifth new ATR aircraft and two more to go, the travel trade industry is comforted by the fact that PW is going from strength to strength and will sooner than later fulfill its mission of extending its services both domestically and regionally. For instance, flights from Tanzania to Lubumbashi in the Democratic Republic of Congo (DRC) have been on PW’s drawing board for a very long time and the market is eagerly waiting. Currently the only way to reach Lubumbashi from Tanzania by air is via Nairobi on KQ or Johannesburg on SAA which costs an arm and leg! The resumption of Johannesburg services as recently promised by the airline’s chairman cannot be overemphasized. ATCL is not likely to resume Dar-Johannesburg flights anytime soon given the restructuring exercise that is currently going on at ATC House. So it can only be PW that can venture into this important market and rescue the customers who at the moment are at the mercy of SAA particularly during the coming FIFA World Cup.

    However, it has not been plain sailing for PW to reach were it is now. Indeed the airline investment is not for the weaklings. Sometimes it takes undying passion for aviation like Mr. Shirima’s to be able to make it because the airline industry is a very devious business fraught with many bottlenecks and challenges. All this calls for patience, resilience and good vision in order to succeed. Despite some qualms on PW we can look at the airline with pride and high hopes as it continues to register one positive milestone after another.


    Byase Luteke
     
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    Nanu JF-Expert Member

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    Mar 29, 2010
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    We just hope that KQ under current CEO will not change as most Kenyans do. I am afraid when the whole management is solely from Kenya and most decisions being made from Kenya that with no time in future, Kenyans will smash it down!!
     
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    MtuKwao Senior Member

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    Apr 9, 2010
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    Yes, I can foresee Kenyans smashing down the airline when the oppottunity comes. Kenyas dont want to see anything other than Kenya this, kenya that. Precision and Shirima should be very worried and balance management and decisions!
     
  4. Ben Saanane

    Ben Saanane Verified User

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    Apr 9, 2010
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    Yeah,Kenyansare always selfish.Mr.shirima must be carefully
     
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    ByaseL JF-Expert Member

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    Apr 15, 2010
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    This can only happen if Air Tanzania closes shop. KQ will pull the plugs on PW and demand to set camp in DAR. Ndio maana Precision Air haitaki ATCL ife!!
     
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