Airlines now focus on domestic routes as coronavirus bites

Thursday March 26 2020

 

By Alex Malanga @ChiefMalanga amalanga@tz.nationmedia.com

Dar es Salaam. Airlines’ competition in Tanzania is now shifting to the domestic market, after international routes were suspended over the ongoing coronavirus pandemic.

Both the Air Tanzania Company Limited (ATCL) and Precision Air - which are the two largest scheduled airlines in the country - have announced suspension of all international flights due to the pandemic.

ATCL has so far suspended routes to Mumbai (India), Entebbe (Uganda), Nairobi (Kenya), Comoro, Harare (Zimbabwe), Bujumbura (Burundi) and Lusaka in Zambia.

Precision Air - the second largest domestic airline in Tanzania - has also suspended its Nairobi and Entebbe routes in Kenya and Uganda respectively due to the imposed travel restrictions.

To cope with the situation, Precision Air said it has shifted its focus on strengthening its local flights, while introducing new domestic routes.

The 26-year old airline is set to launch a five-times-a week Dar es Salaam-Kahama-Mwanza route on March 29 this year, according to its marketing and corporate affairs manager, Mr Hilary Mremi.

Advertisement

He said Precision Air will, with effect from April 6 this year, start flying daily on a Dar es Salaam-Mbeya route.

“Customers are already making their bookings. Our passengers should expect top class services,” Mr Mremi told The Citizen yesterday.

Other domestic routes operated by Precision Air are to and from Arusha, Kilimanjaro, Bukoba, Mwanza, Kahama, Tabora, Mtwara, Dodoma and Zanzibar.

For its part, ATCL’s domestic routes include flying to and from Dar es Salaam, Bukoba, Dodoma, Kigoma, Kilimanjaro, Mtwara, Mbeya, Mwanza, Songea, Tabora and Zanzibar.

The entry of Precision Air onto route s that are already operated by ATCL is expected to set the stage for stiff competition. The immediate pain of the coronavirus malady is fast becomig evident: revenues are in a free fall for both airlines and groundhandling service providers as travel restrictions take hold.

The Precision Air’s Mremi told The Citizen that the number of its weekly customers has dwindled by 50 percent to 5,000 compared to the period before the outbreak of Covid-19 in December last year.

“Precision Air depends largely on the tourist market and that is why there is such a huge drop in a number of passengers due to dwindling of incoming passengers,” Mr Mremi explained.

Data by the Tanzania Civil Aviation Authority (TCAA) showed that ATCL had in 2018 the lion’s share of the domestic market - at 22 percent - followed by the self-styled ‘low cost carrier,’ Fastjet Airlines (19.3 percent). Fastjet is no longer operating due to financial troubles.

Other domestic airlines (with their percentage of market share in brackets) are Auric Air Services Ltd (19), Precision Air (16.3), Coastal Travels Ltd (8) and ‘others:’ 15.4.

The ATCL managing director, Mr Ladislaus Matindi, said he welcomes the new domestic competition.

“We don’t have exclusivity on those routes,” he told The Citizen. “We’re ready for competition.”

As Precision Air is launching new routes, ATCL announced cutting some of its flight schedules, including the Dar-Mbeya route, from twice to once daily until the situation normalizes.

Also, the Dar-Mwanza route has been cut from four times to twice a week.

Some of the world’s biggest international air carriers announced drastic measures to cope with the coronavirus outbreak, with giants Emirates Airlines and Singapore Airlines being among the latest to slash flights. The Dubai-based Emirates - the world’s largest long-haul airline - announced it won’t operate for two weeks starting yesterday.

On Monday, Singapore Airlines said it is cutting 96 percent of its capacity through April.

ATCL’s CEO said: “We need time for extensive data cultivation for us to come up with sum up of real or close to reality effects, instead of considering only a few parameters.”

The coronavirus pandemic has not spared groundhandling service providers, either.

Swissport Tanzania Executive Officer Mrisho Yassin said that, going by its assessment of the situation this week, aircraft volume handled by the company - as well as its groundhandling revenues - are forecast to plunge by 50 percent this year as against earlier projections.

“The financial loss could grow substantially from next week because almost every airline will stop flying,” asserted Mr Yassin.

Swissport handles about 25 airlines in Tanzania.

“We request the government to consider waiving or deferring tax payments, as well as rents and concessions, so that we can cope with the situation.”

Efforts to get comments from the Tanzania Airports Authority (TAA) director general, Mr Julius Ndyamukama, proved futile as his ’phone was not answered.

Swissport also called on the government to allow the firm to give unpaid leave to its staff until the situation stabilises.

Auric Services Limited business development manager Deepesh Gupta said: “there is no business at all. We are fighting for our survival,” Without quantifying the loss Mr Gupta responded.

Nas-Dar Airco general manager Miguel Serra was not available for comment on the matter.

Early this month, the International Air Transport Association (Iata) estimated that the airline industry could lose between $63 to 113 billion of revenues due to the reduced number of passengers.

Airlines would require $200 billion in bailouts to survive the crisis.