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Air Tanzania revamp could just be hot air

Saturday October 01 2016

Coming off a state visit to Rwanda recently, President John Magufuli announced that he had learnt a “winning formula” from his Rwandan counterpart President Paul Kagame. Months down the road, Tanzania made some bold moves in regard to its national carrier.

First came the appointment of Emmanuel Koroso as the board chairman of the new Air Tanzania. Alongside this appointment, President Magufuli also picked Ladislaus Evarist Matindi to be the new managing director. These appointments were quickly followed by the appointment of new board members in the past week by Tanzania’s Minister of Works, Transport and Communication Makame Mbarawa. More appointments are expected.

Second, the airline has just purchased two Bombardier Q400 turboprop aircraft. This particular aircraft model is celebrated as the workhorse of short to medium-range flights, undoubtedly outdoing its closest rival, the ATR72 on operational economy and even deliveries per year.

But President Magufuli’s administration is not stopping at this. They are already planning for medium-range aircraft. Leading aircraft manufacturers Airbus, Boeing and Bombardier have all been invited to Dar es Salaam for a beauty parade.

At the moment, the scales are tilted in favour of Bombardier as the other two key manufacturers have waiting lists up to 2022.

No doubt these developments have been celebrated by Tanzanians and many in the region. For a country the size of Tanzania, it will be vital to have a vibrant, functional aviation industry to facilitate the movement of people and goods.

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However, the composition of the new board of directors who have no airline or travel industry experience casts doubt on their ability to steer the carrier through the turbulence of a turnaround. They will first have to go through a learning curve at the expense of Air Tanzania.

The new management could be hard-pressed to present a feasible growth plan for the medium to long term. You can certainly expect a lot of management impasses during board meetings with regard to key decisions that have to be backed by industry knowledge, insights and experience.

For instance, the two new Q400 aircraft delivered in single class configurations of 76 seats, already represent more than triple capacity increase for the airline, which has until now been operating a single 50 seat Bombardier Q300.

The airline will have to ensure quick utilisation of these aircraft for revenue generation, because most aircraft financing deals require carriers to start repaying the moment they take delivery of the aircraft.

Another challenge for the new managing directors, will be the maintenance programme for the new aircraft. Unless prepared for in advance, the airline will not have adequate in-house infrastructure and capabilities to handle the new Q400 technical requirements.

Aviation experts have time and again pointed out that African governments have no place running airlines and are better suited to working with industry players to facilitate growth by providing infrastructure and regulatory frameworks.

Michael Otieno is an aviation consultant based in Nairobi.

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