Opposition in parliament demands Air Tanzania be declared bankrupt

(eTN) – Sharp differences in opinion emerged in the Tanzanian parliament this week when the Minister for Transport, Dr. Harrison Mwakyembe, moved his ministry’s budget for the financial year 2013/14. When touching on the budget provisions for Air Tanzania (ATCL), he painted a glowing picture to the house of the airline introducing flights to Johannesburg, Mombasa, Bujumbura, and added domestic destinations, claims rubbished by the opposition. In response, the Chairman of the Parliamentary Committee on Infrastructure, Peter Serukamba, was quoted to have said that the government itself was not serious, having during the current financial year allocated 5 billion Tanzania shillings to ATCL. As of February, however, only 1.6 billion Tanzania shillings had been disbursed. The budget allocation for 2013/14 was reduced to only 1 billion Tanzania shillings.

Serukamba also denounced the airline for only operating two planes, saying this crippled the carrier. He went on to demand a detailed analysis of the status of ATCL to establish if the company was worth keeping or should be given either to investors or closed down. Another leading opposition member, Ms. Pauline Gekul, also hit the same tunes when she said that in the view of the opposition, the company was bankrupt and should be declared so. Others demanded the prosecution of those who in the past “looted” state corporations like ATCL and Tanzania Railways.

Aviation analysts in the region agree that there is little room for Air Tanzania in today’s aviation environment unless the government spends significant sums of money to free the airline from historical debts and inject added capital for the purchase of new aircraft, something thought beyond the Tanzanian government’s ability under the already overstretched budget estimates for 2013/14.

Wrote one regular aviation source from Dar es Salaam: “Like before, this is not news. Government knows about the debts; government knows about the Airbus fraud and the liabilities they guaranteed. Since FastJet arrived it has become even more difficult for Air Tanzania. They are piling up more losses, and who will pay for it in the end? The Tanzanian taxpayer. This is not right. Our government should give Precision Air that money they keep sinking into ATCL and get shares in that airline. Then there is reason to designate them as a national airline like the Kenyans have done with KQ [Kenya Airways]. Precision Air can do with the support of government right now, and it would also send a signal to the market that our government at last means business by supporting Tanzanian businesses.”

Another source voiced concern over the present capacity on offer vis-a-vis flights between Dar es Salaam, Kilimanjaro, and Mwanza, claiming there were too many seats on the market for this time of the year, being the low tourist season, and that none of the airlines would be able to operate profitably under such circumstanc