Dar es Salaam. Business magnet Rostam Aziz has made his entry into the aviation sector after buying a controlling stake of Coastal Travels Company Limited in a move that could potentially bring a cutthroat competition among players.
Through his Taifa Aviation Company, Mr Aziz has bought 51 percent of the shares for Coastal Travels from Italian-American investor Carolina Colangelo.
Mr Aziz became the airline’s majority shareholder and investor with effect from September 1, 2022, impeccable sources have informed The Citizen.
The sources, privy to the deal, say Mr Aziz would soon complete buying the remaining 49 percent to own the aviation company in its entirety.
Contacted for comment, Mr Aziz, who also has interests in various other sectors including telecom, energy and mining said he would speak about the deal at a later day.
“I’m outside the country. Let us meet for an interview on this after my return,” he said.
Data from Tanzania Civil Aviation Authority (TCAA) show that with a three percent of the local market share, Coastal Travels--which has over 30 years experience of operations--ranked at fourth place in 2021.
Air Tanzania Company Limited (ATCL) is a market leader commanding 52.9 percent while Precision Air and Auric Air come second and third with 22.8 percent and 10.3 percent respectively.
As Salaam Air was fifth with a market share of 2.8 percent while other airlines shared the remaining 8.6 percent of the market share.
In a fresh bid to strengthen its market position, Coastal Travels Ltd plans to buy more aircraft, including some bigger equipment.
Today‚ Coastal Travels’ versatile fleet comprises 10 Cessna Grand Caravan C208B and four Pilatus PC-12/45.
With all the aircraft being designed to traverse the Tanzanian wilderness, the airline has been coined the iconic title of the Flying Safari Company.
The airline currently operates to over 40 destinations.
Reached for comment, Coastal Travels’ CEO Maynard Mkumbwa said the management and a new investor were currently discussing the airline’s financial situation.
“We have not started talking about new investments and expansion under a new investor but we will definitely go big,” said Mr Mkumbwa, a captain.
“We want to become the market leader in the general aviation sector.”
The airline was currently carrying an average of 120,000 passengers on the annual basis, compared to 200,000 during the pre-Covid days, according to him.
“Under the new investor, in addition to maintaining safety as our number one priority, we will make our services even better,” Mr Mkumbwa exuded his optimism.
An aviation expert with 34 years of experience, Mr John Chambo, cautiously congratulated Mr Aziz for his decision to invest in the aviation sector.
“His decision is commendable. However, for him to succeed, he needs to have a team that knows what to do,” said Mr Chambo, TCAA’s ex-air navigation services director.
“Unlike other sectors, aviation is very strict. This suggests that financial muscles alone is not enough, he must follow the rules of the game, if he wants to make Coastal Travels strong.”
Once they do so, noted Mr Chambo, the airline company would bring a good challenge in the competition.
Another aviation expert with around 47 years of experience John Njawa also cautiously welcomed the new investor in the industry.
“He will make Coastal (Travels) vibrant only if he makes serious investments,” argued Mr Njawa, a former TCAA safety regulation director.
With more strong airlines offering the same services, it will spur the industry’s efficiency in terms of services and prices.
“But if he just entered the industry for the sake of expanding his business portfolio,” said Mr Njawa, “the new investor would not make the difference”.
A renowned aviation expert with decades of experience, Mr Juma Fimbo, said: “Based on his track record as an investor, the future of Coastal Aviation will be bright.”
However, he cautioned, for it to be a reality, he needed to get smart people who would live his dream.
“This business needs an entrepreneur, and Rostam is a perfect one,” recounted Mr Fimbo.
An aviation expert with 40 years of experience, Mr Phillemon Kisamo, a captain, welcomed Mr Aziz to the industry.
“We need to grow the industry. Coastal Travels was as many companies badly affected by Covid-19, and capital injection is needed to help recuperate and stabilise it,” he said.
One thing to be remembered is that, Mr Kisamo observed, this is a very highly regulated and competitive industry and profits don’t come easily.
The world over, airlines struggle to survive.
“The incoming of a strong businessperson is welcome. If this finally goes towards 100 percent acquisition, it is even better as we can claim it is 100 percent owned by a Tanzanian,” said Mr Kisamo.
A strong Coastal Travel will boost employment and the economy of the country.