Precision Air to scale back after losses

Dar es Salaam. Precision Air (PW) has announced a loss of Sh83.9 billion during the year to March 31, 2015.

The public listed carrier blamed the loss on scaled-back operations.

“This performance is largely explained by reduced scope of operations due to delayed recovery of engines from scheduled maintenance and overhauls,” the airline said in a statement.

With the delayed recovery of engines, the company was forced to reduce the number of aircraft in operation from nine to an average of four, sometimes only two during the year.

However, PW chairman Michael Shirima said yesterday that he was optimistic for a turnaround this year.

“Things will improve before the end of the year because the number of aircraft has increased to six and we expect to be operating nine aircraft soon,” he told The Citizen.

He said the carrier was in talks with investors from South Africa, Europe and United States and that a deal would be reached soon.

The airline’s problems were compounded in 2011 when it raised only $7.4 million of the envisaged $17.5 million in its Initial Public Offering (IPO) at the DSE.

Furthermore, PW registered a profit-before-tax of Sh1.841 billion during the year ending March 31, 2012 before reporting a Sh30.812 billion loss the following year.

In August 2013, the carrier reported that maintenance costs almost doubled from Sh11.9 billion to Sh23.6 billion in the year ending March 31, 2013.

The airline is embroiled in financial turmoil at a time when Kenya Airways (KQ), which has a 41.23 per cent stake in PW, is grappling with problems of its own.

In July, KQ announced a record $290 million loss that sent its management back to the drawing board in search of a $600 million bailout package to keep it afloat.