Mzee Mwanakijiji
Platinum Member
- Mar 10, 2006
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10th December 2010
A US firm, Celtic Capital Air Corporation has threatened to sue Air Tanzania Company Limited (ATCL) for breach of contract covering the lease of a Boeing 737 aircraft.
Celtic Capital Air Corporation Managing Director Fabian Bachrach told The Guardian in an exclusive interview that ATCL was dilly-dallying on the replacement of the B737 and the government had also not guaranteed as expected.
He claimed this constituted breach of the terms of the contract, and could result in serious consequences for the ATCL and the government in general.
We signed an 18-month contract to work with ATCL until July 2011, but some of the terms in the contract seem to be breached by ATCL, Bachrach said, adding that the contract commenced on January 2 this year between his company and ATCL management.
Bachrach said apart from ATCL ignoring to take the aircraft, it had not paid its debts.
ATCL seems to have decided not to replace the B737, they ran off the runway in Mwanza and they are also not paying their debts, Bachrach claimed.
The government has also not paid the guarantee they gave us. There will be serious consequences soon, he said without giving details of the consequences.
Recently, the Celtic Capital Air Corporation, which leased the aircraft to the troubled ATCL threatened it would seek an end to the arrangement unless the government took serious remedial measures.
It specifically mentioned the need to support the national flag carrier with massive capital injections and a competent management team.
Bachrach said he saw no possibility of the cash-strapped ATCL surviving without a really substantial shot in the arm from the government.
Besides injecting 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 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. Worse still the debt burden keeps piling up as time goes by, he added.
According to Bachrach, ATCL currently is over US$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.
On March this year, Air Tanzania Boeing 737-200 crashed as it was landing at Mwanza airport. The aircraft with registration number 5H-MVZ flying to Mwanza from Dar es Salaam, veered off the runway and got stuck in the middle of the landing strip after experiencing engine failure.
Efforts to get a comment from the Minister for Transport Engineer Omari Nundu, Permanent Secretary Omari Chambo, and ATCL Managing Director William Haji failed.
But recently Minister Nundu officiating at the climax of the Civil Aviation in Dar es Salaam said the government would no longer pump subsidy into the airline.
He said instead the government was keen on getting competent investors to ensure smooth operation of the aviation industry.
SOURCE: THE GUARDIAN
A US firm, Celtic Capital Air Corporation has threatened to sue Air Tanzania Company Limited (ATCL) for breach of contract covering the lease of a Boeing 737 aircraft.
Celtic Capital Air Corporation Managing Director Fabian Bachrach told The Guardian in an exclusive interview that ATCL was dilly-dallying on the replacement of the B737 and the government had also not guaranteed as expected.
He claimed this constituted breach of the terms of the contract, and could result in serious consequences for the ATCL and the government in general.
We signed an 18-month contract to work with ATCL until July 2011, but some of the terms in the contract seem to be breached by ATCL, Bachrach said, adding that the contract commenced on January 2 this year between his company and ATCL management.
Bachrach said apart from ATCL ignoring to take the aircraft, it had not paid its debts.
ATCL seems to have decided not to replace the B737, they ran off the runway in Mwanza and they are also not paying their debts, Bachrach claimed.
The government has also not paid the guarantee they gave us. There will be serious consequences soon, he said without giving details of the consequences.
Recently, the Celtic Capital Air Corporation, which leased the aircraft to the troubled ATCL threatened it would seek an end to the arrangement unless the government took serious remedial measures.
It specifically mentioned the need to support the national flag carrier with massive capital injections and a competent management team.
Bachrach said he saw no possibility of the cash-strapped ATCL surviving without a really substantial shot in the arm from the government.
Besides injecting 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 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. Worse still the debt burden keeps piling up as time goes by, he added.
According to Bachrach, ATCL currently is over US$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.
On March this year, Air Tanzania Boeing 737-200 crashed as it was landing at Mwanza airport. The aircraft with registration number 5H-MVZ flying to Mwanza from Dar es Salaam, veered off the runway and got stuck in the middle of the landing strip after experiencing engine failure.
Efforts to get a comment from the Minister for Transport Engineer Omari Nundu, Permanent Secretary Omari Chambo, and ATCL Managing Director William Haji failed.
But recently Minister Nundu officiating at the climax of the Civil Aviation in Dar es Salaam said the government would no longer pump subsidy into the airline.
He said instead the government was keen on getting competent investors to ensure smooth operation of the aviation industry.
SOURCE: THE GUARDIAN