Tanzania Daily News (Dar es Salaam)

5 February 2013

Tanzania: Competition in Dar es Salaam Skies Drives Out Weak Airlines

INCREASED competition in the skies is seen as good news to Tanzanian air travellers following the reduction of fare by local airlines, although there are fears that some might end up losing their wings completely.

Tanzania's domestic aviation industry has in recent days seen some airlines making their way into the local market with strategies targeting travellers at low and middle income bracket.

Competition intensified after the arrival of FastJet, which industry analysts say has posed a big challenge to local airlines including Precision Air (PW) and the state-owned Air Tanzania Company Limited (ATCL). But the battle is mainly between FastJet and PW because ATCL is not stable.

The trend is regarded as a blessing to local travellers since the three airlines are currently jockeying to offer best services at the lowest possible cost to attract and retain their clientele. Statistics show that PW is still enjoying the lion's share in the market. Precision Air controls over 60 per cent of the market share. The competition in the skies has also affected international airlines.

British Airways (BA) recently announced that it will close its offices in Tanzania after being in the country for four decades. BA officials say that they have been driven out of the country by what was loosely described as "failure to operate profitably." The airline, which during the colonial era traded and operated as British Overseas Airways Corporation (BOAC), from 1939 to 1946, has announced that it is suspending its service from London's Heathrow Airport to Dar es Salaam after March 31.

Several stakeholders and economic analysts interviewed in Dar es Salaam have said that the move will likely lead to loss of revenue and other social benefits. A statement issued during the week states that BA flights which were operating three times a week are being suspended because they don't make a profitable contribution to business.

"Dar es Salaam was not performing well from a commercial perspective so we have taken the decision to suspend the route," a statement issued by the airline in Dar es Salaam stressed. According to the statement, customers booked to fly with British Airways after March 31 will be offered a full refund or be re-booked onto flights to or from Nairobi, Entebbe or Lusaka.

However, after the BA decision to close shop in the country for failure to operate profitably, the government has started looking for options on direct flights to London. The Director of Tourism, Mr Ibrahim Mussa, said in an interview over the weekend that the government has initiated talks with Virgin Atlantic, one of the biggest airline companies in Britain.

"The Ministry of Tourism and Natural Resources in collaboration with the Ministry of Transport had initiated preliminary talks with the UK carrier, Virgin Atlantic, with hopes of reaching an agreement to take over the route left by the BA," he said. He said Virgin Atlantic, the biggest UK private airline closed the five-times weekly route to Nairobi in September 2012, after operating for the last five years.

He said the closure of BA business in the country was not good news because it will not only cause loss of revenue and other social benefits but also inconvenience some travellers who were taking direct flights to Heathrow Airport in London from Dar es Salaam. Although assessment on how the withdrawal of BA business in the country will affect the tourism industry has not been done, Mr Musa said surveys show that large number of tourists from UK were already using other airlines like Emirates, Qatar and Ethiopian which have daily flights to Tanzania.

Credible sources in the airline industry said the BA was among the few airways shipping sensitive cargo including light weapons, local and foreign banknotes and minerals such as gold, diamond, Tanzanite to the international markets. Swissport Tanzania Limited Chief Executive Officer Gaudence Temu said that his company will suffer from the airline's decision to stop flights to Dar es Salaam because they have been providing cargo handling services since 1985 when the firm was incorporated.

"We will definitely lose considerable revenue not only for the nation but also for Swissport (T) Limited that has been handling all BA cargo for many years," remarked Mr Temu. Mr Temu, who is also Chairman of the Tourism Confederation of Tanzania, pointed out that the United Kingdom is one of the biggest tourist markets for the country and the suspension of the flights directly to and from the country would affect the flow of tourists and hence the badly needed foreign exchange from the sub-sector.

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