Business

Air Tanzania ditches Chinese firm and partners with Air Zimbabwe

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An Air Tanzania airplane. The airline was privatised in 1998, when South African Airline bought 49 per cent shares Photo/FILE

An Air Tanzania airplane. The airline was privatised in 1998, when South African Airline bought 49 per cent shares Photo/FILE 

By MIKE MANDE

Posted  Monday, July 5   2010 at  00:00
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Tanzania may sever ties with China’s Sonangol International Ltd over failure by the company to invest and take over 49 per cent shares in the ailing Air Tanzania Company Ltd (ATCL) as agreed four years ago.

The inaction by the company has prompted the government to fund the airline to the tune of $540 million to rescue it from collapse.

And in a move to increase capacity and reduce operational expenses by servicing selected routes, Tanzania approached the government of Zimbabwe and the two are now finalising details for a major partnership between the countries’ state airlines.

Strategic

This move is aimed at saving Air Zimbabwe and Air Tanzania Company Ltd from total collapse, while creating one of the biggest commercial agreements on African routes which are not serviced by other major airlines.

A team of experts from the two countries is working on the partnership proposals which will pave the way for the strategic partnership.

The purpose of the discussions, according to information made available to The EastAfrican, is to outline terms of the partnership and the implementation of the two airlines turnaround strategy.

The two governments said that they recognise the fact that partnerships are a viable means of success.

The two airlines are also apparently on the look out for a strategic partner because of the challenges that they have faced in the past when they operated as single ventures, while other continental airlines thrived through strategic partnerships which allow for bigger catchment.

Dr Peter Chikumba, the group chief executive officer of Air Zimbabwe, told The EastAfrican from Harare that the partnerships were necessary to make the operations of the two airlines proceed smoothly.

Dr Chikumba said that successful airlines worldwide were pursuing strategic partnerships because of their viability and bail out options when things go wrong for one.

“There have been challenges with the operationalisation of the two airlines and we feel if the two governments can see a need to correct things to finance and clear the debt, then the partnership will assist in running the operational costs,” he said.

According to Dr Chikumba, the two governments are following in the footsteps of the few African countries in international partnerships, and want to tap into their experience.

If realised, the partnership — which also includes joint aircraft spare parts purchase and exchange training programmes — will be the first major venture the airlines have collaborated in.

The pooling of resources will also help absorb unit costs and increase the airlines’ revenue base. 


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