ATCL now eyes Chinese planes

BY FLORIAN KAIJAGE

4th August 2013

MA60 turbo propelled passenger plane, the first Chinese made aircraft to acquire safety certificate in overseas markets.

 After many attempts to revive its lost glory, Air Tanzania Company Ltd (ATCL) is again in a business deal with a little known Chinese local airline in a move that could see the national airline acquiring China-made aircraft to strengthen its operations.

ATCL, the first company in East Africa to acquire brand new Boeing 737-200 in its heydays, has never operated a Chinese-made aircraft in its 36 years of existence.

According to details gathered byThe Guardian on Sunday, the latest ATCL plan is to strengthen its operations through by eight aircraft from a Chinese company  identified as Joy Air Ltd  in the next few months.

Though The Guardian on Sunday could not independently verify the viability of the plan after top ATC’s officials declined to disclose more details, reliable sources within the airline confirmed that the deal had already been okayed last month.

The first batch of the aircraft is expected in the country during the second quarter of year 2014, as part of the national carrier’s efforts to re-position itself in the competitive aviation industry.

Currently, the national airline has a single 50-seat aircraft, Bombardier Dash 8Q-300 that flies to Kigoma, Tabora, Mtwara and Hahaya in the Comoros.

It now seeks to operate five MA60 turbo propelled (52-seater) and three Y-12 aicraft, all manufactured in China.

As is the case with the airline company (Joy Air), the aircraft brands are little known in the world of civil aviation.

Joy Air Ltd was formed jointly by China Eastern Airlines and AVIC in 2008 and is based at Xian.

To express the seriousness and determination on the proposed deal, a high level three-man delegation from Joy Airline was in Dar es Salaam last week to meet the ATCL management and the technical staff.

The Chinese delegation was headed by Joy Air vice president, head of engineering quality control and head of technical services, but their names could not be availed immediately.

Following the visit --which was in principle technical  Prime Minister Mizengo Pinda, accompanied by several senior experts is expected to visit China in the next few weeks on a mission aimed at finalizing the deal.

Comparatively, all potential ATCL competitors within the East African Community -- Kenya Airways, Rwanda Air and Air Uganda -- operate well known global brands such as Boeing (USA), Airbus (France), Canadian Regional Jet (CRJ - Canada) and Embraer (Brazil). Burundi and Uganda are the only EAC member countries without national airlines because Air Uganda is a privately owned carrier.

Most of the existing brands in East Africa are cost-effective in terms of fuel consumption and other operational aspects.

Sources privy to ATCL informed this paper this week that the programme was part of strong Tanzania-China bilateral relations.

“As you may recall, 16 agreements were signed during Chinese President Xi- Jinping’s visit to Tanzania early this year … one of those agreements was on the aviation sector and particularly on the revamping ATCL,”one of the sources revealed.

MA60 made its maiden flight in February, 2000. By March, 2013 there were 80 aircraft in the market with expectations to deliver 165 aircraft by 2016 according to current orders. It is manufactured by Xian Aircraft Industrial Corporation that operates under China Aviation Industry Corporation (AVIC).

The Y-12 is a 19-seater manufactured since 1982 and made its first flight in 1984. It is commonly used by various national air defence forces including Tanzania People’s Defence Force (TPDF). Others countries are Uganda, Kenya, Eritrea, China, Cambodia, Namibia, Paraguay, Peru Sri Lanka and Zambia.

They are also used by some civil operators in China, Bangladesh, Indonesia, Malaysia Nepal and Tonga islands.

ATCL plans to operate the MA60 aircraft for major domestic and regional routes such as Mwanza, Kilimanajaro and Zanzibar whereas the Y12 would take on tourist routes to the National Parks and Game reserves such as Mikumi, Selous, Serengeti, Ngorongoro and others.

The modality of acquiring the eight aircraft from China remains unclear  whether it is through lease or outright purchase.

However, with the Tanzania government reluctant to inject funds in the cash-strapped national carrier, the leasing option seems the most appropriate option.

ATCL has a tangible cash of around Sh10 billion, accrued from an insurance cover for Bombardier Dash 8Q-300 that crashed at Kigoma Airport on April 19, 2012.

The money is kept at one of the bank accounts of the Consolidated Housing Corporation (CHC), a government department tasked to oversee all state-owned organizations earmarked for divestiture, the ATCL among them.

ATCL acting Chief Executive Officer, Captain Lusajo Lazaro could neither confirm nor deny the project existence. Instead, he directed this reporter to contact commercial direct Juma Boma.

“He is the company’s spokesperson … so contact him … he will explain everything to you,” Captain Lazaro said.

After several unanswered phone calls, Juma Boma finally replied to a text message: “Could you please contact the Ministry on this matter.” ATCL is under the Ministry of Transport.

This development comes at a time when ATCL has been trying to acquire on lease a second aircraft – a 50-seat turboprop Fokker 50 from a private aviation company based in Addis Ababa. Fokker aircraft are manufactured in the Netherlands.

Information reaching this paper this week indicate that the proposed lease of aircraft has stalled because ATCL and aircraft owners failed to reach an agreement.

This is the second time Tanzania is opting for China investment in a bid to rescue the financially troubled national airline, the first attempt being in 2008 when the country engaged the Sonangol, under the China International Fund Ltd as a major financier.

The Chinese company ended up brokering a controversial deal under which ATCL leased the costly Airbus 320 which left the airline with over Sh50bn in unpaid debts.

Strangely, the leasing bill accumulated as the clock ticked by, although the plane stayed in France for seven months undergoing major technical maintenance referred to as ‘Check C’ after 12 years. The aircraft was eventually sold to an aviation firm in Zimbabwe for $16 million (Sh25.6 billion).

Established in 1977 as Air Tanzania Corporation (ATC) after the collapse of the former East African Community, the national carrier it performed smoothly until in the early 1990’s when it failed to withstand emerging competition from prom other local airlines such as PrecisionAir.

Even the investment by the South African Airways could not bring anticipated relief and performance improvement, only for the marriage to break up in 2006.     

SOURCE: GUARDIAN ON SUNDAY