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Tanzania High Court

Aviation news: Legal case against Precision Air termed frivolous

Wolfgang H. Thome, eTN  Feb 06, 2011

(eTN) - A case filed in the Tanzanian High Court in Dar es Salaam a few days ago, against the country’s leading airline Precision Air over an alleged claim of about US$230,000, has been called "frivolous" by regular aviation observers in Tanzania. Due for a hearing on February 11, when undoubtedly more light will be shed on the validity and origin of the claim – the lawyers of the plaintiff have refused to answer any questions – the case was brought by a local company reportedly acting on behalf of a German firm. The case appears aimed to get a court order to wind up Precision Air, and an advert placed by the plaintiff’s solicitors in the local media was inviting third parties with an interest to support their claim to come forward within a week prior to the court hearing.

Reliable sources in both Kenya and Tanzania, however, pointed out that the timing of the case is indicative of the plaintiff’s thinly-concealed attempt to throw the proverbial spanner into the works of the imminent IPO. The shareholders of Precision Air were planning to launch the IPO shortly, and the Dar es Salaam stock exchange would likely have to halt the process while "winding up proceedings" were before court, and only restore the IPO to the market once the case has been resolved.

There is wild speculation as to what or who may be behind this legal case, timed with the final stage ahead of the planned IPO, and most speculation goes into the direction of attempting to cause maximum damage to Precision Air’s reputation – which if true and proven, could make for yet another interesting case in court, should Precision Air seek legal redress and compensation.

Kenya Airways, presently holding some 49 percent in the airline, and according to past information, is aiming to reduce their share to about 30 percent after the IPO has been launched. Sources from Nairobi, however, have maintained that the commercial cooperation between the two airlines would not only be maintained but more likely increased further in the coming months and years.

Precision has become Tanzania’s number one airline, partly due to the rapid decline of national flag carrier Air Tanzania, and also because of the well-planned fleet and network expansion, which saw several brand-new ATR aircraft join the fleet over the past few years. The airline connects all major airports in Tanzania with the commercial capital of Dar es Salaam and also operates regular flights into the region, many of which are codeshared with Kenya Airways.

Aviation news: Legal case against Precision Air termed frivolous
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