Air Tanzania may be a loss making giant, but it has friends in high places.
The National Flag Carrying airline the Air Tanzania Company Limited recently received a government bailout of 31.55 billion/- to pay staff salaries, as it continues to struggle to float its ailing operations.
Reports from the Controller and Auditor General (CAG), Charles Kichere, indicate that the state-owned airline suffered serious losses for six consecutive years.
In the fiscal year 2022/23, the airline was hit with a loss of 56.64 billion/- up from a loss of 35.23 billion/- recorded in 2021/22.
In the same fiscal year, it received 31.55 billion/- in government subsidy for employee salaries and pilot training.
ATCL also got capital grants from Treasury in 2022/23 amounting to 7.45 billion/- for development projects.
“The company has continued to get consecutive losses despite receiving government subventions,” the audit report said.
“The reason for underperformance includes excessive operating costs and fixed costs such as (aircraft) lease cost and insurance on grounding of Airbus A220-300 aircraft due to technical issues.”
The technical issues facing the Airbus planes include corrosion and manufacturer-identified engine faults affecting the global A220-300 fleet, the report said.
“This grounding of the (Airbus) aircraft resulted in significant disruptions of flights, leading to both lost revenue and the inability to recover fixed costs associated with the grounded aircraft,” it said
ATCL has four Airbus A220-300 aircraft in its fleet.
The aircraft are owned by the state-run Tanzania Government Flight Agency (TGFA) and are leased to ATCL.
The CAG noted that ATCL failed to effectively implement its Strategic Plan (2022/23 – 2026/27), which required the carrier to expand its international routes by mid last year.
The new routes that the national airline failed to launch in 2023 include Dar es Salaam to Dzaoudzi-Mayotte, a French Indian Ocean territory between Madagascar and the coast of Mozambique.
ATCL was also required to relaunch the Dar es Salaam-Johannesburg route by mid last year but failed to do so.
The airline last month launched a new route from Dar es Salaam to Dubai.
The CAG noted that “there is no optimal utilisation of airplanes for international routes” due to inadequate strategies despite the government continuing to buy more planes for ATCL.
“Limited expansion of international routes may lead to denying the company additional revenue by inadequate utilisation of the aircraft capacity,” the report said.
The government has formed a team of technical experts to investigate and propose solutions to prevent similar occurrences in the future, the CAG said.
ATCL’s fleet of 15 aircraft include four Airbus A220-300s, two Boeing 737 Max 9s and two Boeing 787-8 Dreamliner planes, which are long-haul planes designed for regional and international routes.
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