Tsh 54 billion bailout else
Air Tanzania Corporation in throngs of death, again
Friday, 24 July 2009 08:41 | Written by Administrator |
* Travel agents no longer sell ATCL tickets
*Causes of its woes, impact and prospects
* Dec Tsh2bn bailout settled debts
* Gov to offer Ths 20bn
* Management hits back, talk of sabotage
YAKOBE CHIWAMBO AND ZUHURA HUSSEIN
THE much-troubled Air Tanzania Corporation Limited (ATCL) still has a long way to crawl out of the abyss in which it has fallen in terms of performance despite frantic efforts by the Government to rescue it, Business Times has established.
Late last year, the so-called national air carrier suspended its operations for more than a month. Although the Government pumped Tsh2 billion into the ailing Corporation, it was more or less a classic case of throwing good money after bad! That tidy sum is equal to US$1.54m at an exchange rate of Tsh1,300 to the dollar!
That financial rescue package notwithstanding, ATCL has continued to cancel otherwise scheduled flights now and then. Currently, the airline has only one aircraft in operation out of the two it boasts to its name! The Airline also has two other planes on hire from other sources.
The 'national carrier' is bedeviled by the twin problems of having only one flying plane, and a singular lack of technical manpower. Compounded by questionable management decisions that were made in the last decade or so, all this has caused what was once upon a time the Pride of Tanzania in the Skies to virtually kiss the dust, a reliable source told Business Times.
Weeks of investigation by this paper unearthed some of the reasons which make ATCL the laughing stock it is today, scheduled flights at the drop of a hat as a matter of course!
Flight cancellations
ATCL has continued to cancel scheduled flights now and then. Worse still, when delays and cancellations occur, ATCL modus operandi gets miles away from the idea of refunds, or even slightest compensations in the form of meals and accommodation.
Long delays, cancellations and lack of care have led to overwhelming complaints from customers against ATCL.
Business Times witnessed a slight commotion between would be passengers and ATCL officers at the departure gate of Julius Nyerere airport, about 9.00 am on Saturday, July 4 2009.
A day before the fracas, an Air Tanzania Dar - Mwanza flight was cancelled and passengers were promised they would travel the next day instead (without being given a word on their rights to compensation, full or partial refunds, possibility of re-routing them or shifting them to other airlines such as Precision air).
But the scheduled next day's flight to Mwanza was already full of bookings that included several journalists who were heading to Mara via Mwanza, on investigation about the alleged seepage of poisonous substance by Barrick Gold's North Mara mine into Tigithe River.
ATCL decided to clear the backlog first. So, most of the scheduled July 4th passengers couldn't board the plane and were told they would travel in the evening instead, again, without ATCL's concern about meals, accommodation, re-routing etc the hence commotion.
Already, customer grumblings against ATCL have boomeranged at air ticket agents, some of whom have now decided to kick the corporation out of their good books.
Only one plane operating
Only one of the two Dash 8-300 planes ATCL owns is operational.
An impeccable source who spoke on condition that his/her identity would not be published explained that the other Dash 8-300aircraft is grounded at Mwanza Airport while its engines are ostensibly undergoing repairs in Italy!
Dependency on hired planes
ATCL has at its disposal one Airbus 320aircraft hired from Walis Trading Company of France, as well as one Boeing 737-200hired from Celtic Corporation. However, the 150-passenger Airbus was grounded last year when ATCL's (Air Operator Certificate) was suspended.
In the event, the Government and the ATCL at first contemplated terminating the lease but then, fearing incurring untold costs which could result from court litigation, entered into negotiations with the owners, WTC.
The negotiations were successful," our source said. In March this year, the French firm removed some of the conditions for renting the Airbus after considering the effects of the financial meltdown and the fact that the plane was grounded.
In that regard, the Government was required to issue a Letter of Comfort the lessor that monies owned to him would be paid, and that the aircraft would be taken to Sabena Technics in France a 'mandatory periodic maintenance of aircraft' (C).
The letter was issued in late-June 2009, and the air craft is currently undergoing the check in France. It was expected to be back with ATCL this July.
"Whether the Airbus-320 flies or not, ATCL is obligated to pay WTC as the contract states," the source stressed adding more financial woes to the Airline.
Inadequate number of pilots
ATCL has a dire shortage of Tanzanian pilots, and has to employ foreign pilots especially for A320 and the Dash 8-300 fleet. This, our source noted, costs the Airline million in scarce foreign currency. However, this may be offset if and when the five Tanzanian pilots being trained in France for the A320 aircraft will 'come on-stream!'
But, even then, the new pilots would not solve the pilots-shortage problem.
"A Dash 8-300 pilot cannot operate a Boeing 373-200 or an Airbus," the source notes, adding that it costs about US$30,000 (roughly Tsh39m) to convert one set of crew to operate a different plane.
Indeed, the Airline has converted a good number to operate the Dash 8-300 airplane... But it did not convert all since it needed some to operate the Airbus and B737-200 aircraft if and when they become operational again!
What should be done to strengthen ATCL?
The source said there is a possibility of ATCL being revived but only if a number of things are done to that end.
"The Government must release enough funds to widely promote ATCL as a functional and reliable airline. As it is, air travellers have lost confidence in it, largely as a result of the frequent flight cancellations, coupled with the suspension of some of the airline's routes, said.
"The Government must boost its own (national) airline if it wants to remain in the air transport business," he said.
He noted that ATCL has the potential for a significant role in promoting the country's tourism industry and regional activities such as the 2010 World Soccer Cup Finals in South Africa.
In a related Survey, Business Times sampled the views of some of ATCL's Agents on the matter.
A good number of them expressed much disappointment with the Airline. In fact, four of the five interviewed have suspended ATCL ticket sales!
I stopped selling Air Tanzania tickets because they were often cancelling their flights at short notice, thereby inconveniencing our customers, said a representative of Reza Travel & Tours Ltd in the city centre. Not only that, he went on... We booked with the Airline twice, and the flights were canceled. We incurred losses, as ATCL took long to refund the money.
An official of the Star World Travel Agent said they were not selling ATCL tickets anymore but refused to articulate the reason(s) for that.
Jumba Travels Services Ltd along Upanga Street said they do sell tickets for airlines except ATCL tickets. Again, the fellow was unwilling, unable or unready to reveal more details, pleading that he was not the firm's spokesman!
ATCL answers back, Acting Managing Director says we can do it
In the mean time, ATCL's Acting Managing Director, Willian Itaji said yesterday that ATCL had not been canceling flights as propounded by some travel agents.
We have not canceled flights since January, but due to some technical problems sometimes we reschedule the trips, he said.
He said, some agents have been amplifying the lies that ATCL cancels flights often, with an intention of assisting ATCL competitors gain the largest market share.
It is surprising that some people with malicious intentions keep on painting a negative picture on the national airline, he said.
He said the number of flights that they have canceled since January this year did not exceed three.
According to him, many Tanzanians prefer traveling by ATCL but they are being frustrated by agents that are promoting ATCL competitors.
Itaji said in the rare cases that they canceled flights they duly informed their customers and provided them with accommodation.
He acknowledged that ATCL had numerous debts but since the government injected money the debts have been reduced.
He said the debts would not prevent it from operating though they needed more funds to improve operations.
During this years budget, ATCL had asked for Tsh 54 billion boost but the Parliament only approved Tsh 20 billion.
Itaji said in three weeks time the C-Check for the Airbus is expected to be finished while the Boeing 737-200 and the other Dash are expected to be operational in a week's time.
According to Itaji, the Dash8 300 makes a total of 21 flights per week, all of them being internal flights to Mwanza (14 times) Kilimanjaro, Dar , Zanzibar-Dar (3 times) and Kigoma - Tabora (4 times).
About pilots, ATCL said four Tanzanian captains have just finished training for Airbus.
The whole course cost US$500,000. It is a great success not only to ATCL but to the nation, he said Thomoson Byarushengo, Sales and Distribution manager for ATCL.
According to Byarushengo, it is the first time that the country got its own captain for the Airbus that has the capacity of 150 passengers.
MMH KAZI NZITO