Aviation players upbeat despite tough task ahead

Dar es Salaam. A new plan is in place to turn Tanzania into a hub of air transport in the region, dislodging giants that own respected fleet sizes and with some of the best infrastructure on the continent.

Aviation players are optimistic that the plan is feasible and that efforts to that goal were already in various stages of implementation.

“We have what it takes to transform Tanzania into an air transport in the region….doing so will have multiplier benefits on other sectors like tourism, agriculture, manufacturing and the economy as a whole,” the Tanzania Civil Aviation Authority (TCAA) director general Hamza Johari told participants to an aviation stakeholders’ forum in Dar es Salaam recently.

They bank their hopes on the expansion works currently being undertaken at the country’s airports – including construction of Terminal 3 at Julius Nyerere International Airport (JNIA), revival of Air Tanzania Company Limited (ATCL) and expansion of aviation training capacity locally at the National Institute of Transport (NIT) and at the Civil Aviation Training College (CATC).

Mr Johari said the ongoing ATCL restructuring and re-equipment exercise was meant to restore and raise the status of the airline to fill the locally-based inter-continental carrier gap.

However, to meet the goal, Tanzania will have to dislodge Kenya, South Africa and Ethiopia which are enjoying a number of advantages in air transport.

Kenya’s Jomo Kenyatta International Airport has the capacity of handling 7.5 million travelers annually. It is also well served with a number of international flights, including the country’s own Kenya Airways which has a total of 34 operating jet aircraft and flying to over 60 destinations locally and internationally.

Similarly, South Africa’s OR Tambo International Airport on Johannesburg – currently the busiest airport on the African continent – has the capacity of handling 28 million passengers annually.

Apart from tens of international air transport operators, the airport is also well served by the country’s own South African Airways, complete with its 57 jet aircraft, travelling to 59 destinations across the world.

In the same vein, Addis Ababa’s Bole International is well served by a number of international operators and the country’s own Ethiopian Airlines which flies passengers and cargo to a total of 113 and 35 destinations respectively, using its fleet of 92 aircraft.

Ethiopia is currently injecting $345 million – funded by Exim Bank of China – to expand the Bole International Airport so it can handle 22 million passengers annually from the current seven million.

The figures compares poorly to JNIA which currently has the capacity to handle about 1.2 million passengers per year. The completion of Terminal 3 will however bring the capacity up by 6.4 million to make a total of 7.6 million, largely dependent on foreign-owned air operators (Kenya Airways, South African Airways and Ethiopian Airlines among others) for international destinations.

But aviation players in the country are optimistic with a total investment of Sh3.9 trillion (to be sourced from the government, development partners and members of the private sector) in improving the country’s airports in the coming few years, Tanzania may surely shine.

The former Tanzania Airports Authority (TAA) acting director general, Mr Salim Msangi, said at the forum that the money would cater for rehabilitation and upgrading of airside pavements and facilities at JNIA and Mpanda airports, resurfacing of runway, taxiway and apron at Arusha, Tabora and Mafia airports.

Other completed projects include, upgrading of Kigoma airport’s runway and upgrading of Bukoba’s runway, taxiway, Apron and construction of terminal building. Ongoing airports projects include Songwe airport, Mwanza airport, Kilimanjaro International Airport and JNIA (terminal three).

Besides, the aim is to upgrade airports in border regions so they can handle neighbouring land-locked countries whose goods pass via the Port of Dar es Salaam and JNIA.

“Currently, out of 50 per cent of international traffic, Kenya is the destination for 30 per cent of them and Johannesburg is the destination for 20 per cent them to have connections to other countries…..Although landlocked countries depend on Dar es Salaam Port, Tanzania handles 20 per cent of their imports and exports…This is what we want to change,” Mr Msangi’s predecessor, Mr George Sambali once told The Citizen.

And, speaking at a forum in Dar es Salaam a fortnight ago, a member of the board of directors for the TCAA Consumer Consultative Council, Mr Juma Fimbo said with much of the training in aviation related aspects including pilots, maintenance engineers, air traffic controllers and air transport managers now being conducted locally at NIT and CATC, the future looks bright.

Tax burden

However, operators are of the view that existing high and multiple taxes that they are subjected to, may hinder the country’s aspirations.

“Such charges as landing, parking, passenger services, departure and navigation fees, insurance costs and an 18-per cent value-added tax (VAT) on leasing of aircraft and spare parts, fuel and experts training costs add to the cost of doing business and turn us into an expensive destination,” said the fastjet Tanzania head of government and regulatory affairs, Mr August Kowero.

The Precision Air chief executive officer, Ms Sauda Rajab echoed similar sentiments, noting that it was becoming increasingly difficult to convince the government that the taxes were doing much harm than good on the airline industry and the economy as a whole.

“It’s an easy win for government, a quick money grab. The number of taxes levied on airlines and their customers is so high and the government fails to see the negative impact that these taxes will have on the economy in the long term,” explains Ms Rajab.

Partnerships

According to Ms Rajab, the only way to form a strong national airline for Tanzania – that can be able to compete globally - was through partnerships among the existing operators.

“We should move away from the thoughts that each airline can do everything on its own, or, we will be shooting ourselves in our own feet,” she warned. Her views were seconded by an aviation expert Misha Hango, suggesting for joint ventures and code shares among airlines. This, he said, was meant to seek ways to improve connectivity between international and regional flights to serve the needs of customers.

Alliances enable the participating airlines to strengthen their competitive positions and to improve their access to existing and emerging markets, according to him.

“In a quest to be adaptable to changing business conditions, you need to develop your networks and enhance connectivity by working with various partner airlines on several fronts, including partners’ joint ventures, code-sharing and even revenue sharing arrangements to reduce costs and ensure continued earnings,” noted Mr Hango.

Through these arrangements, according to him, carriers are able to partly avoid the high costs of serving many foreign cities with their own aircraft and to overcome some of the restrictions under bilateral agreements which often limit the number of cities that a carrier can serve with its own aircraft.