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Boeing 737-200 burden to ATCL

3rd February 2013
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Ailing Air Tanzania Company Ltd (ATCL) has suspended operations of the leased Boeing 737-200 on the Dar es Salaam - Mwanza route and operates with a single plane, the Bombadier Dash 8-300 in a bid to cut operational costs, The Guardian on Sunday has reliably learnt.

Information reaching this paper this week had it that the national airline has reduced the frequency of the Boeing plane on the main route as its costs proved unbearable.

Well placed sources with the national carrier in Dar es Salaam affirmed that the plane, leased last October from a South African company, StarAirCargo (Pty) Ltd at a rate of $1,350 (Sh (2,160,000) for every block hour with a guarantee of 150 block hours a month, made its last trip to Mwanza early this week.

“We are operating with Dash 8 only for the past three days. It flies to Kigoma in the morning and in the evening it goes to Mwanza. I am told this is due to high costs of running the Boeing,” a well placed official indicated.

The source added: “This may be logical on costing grounds but on the other hand it poses a risk of losing out on the passengers due to different flying durations between Dar es Salaam and Mwanza for the two aircraft.”

Under normal circumstances the jet-engine Boeing 737-200 flies for 75 minutes whereas a propeller-engine Dash 8 spends about 140 minutes between the two cities.

The Guardian on Sunday has also established that ATCL is in the process or reviving its route to the Comoro islands using the Boeing aircraft. The last trip to the Indian Ocean islands was mid 2012 using Boeing 737-500 formerly leased from Aerovista of Lebanon. It was returned to the owners following a contractual dispute.

The ATCL Acting Commercial Director, Mwanamvua Ngocho confirmed yesterday on the phone that the route to the Comoros would be revived.

“The plan is still there and the revival date will be announced soon,” she stated.

But when asked about the reduced frequency of the Boeing for Mwanza route she replied: “Listen, why asking us on the type of aircraft we are operating with? Do you ask the same question to other airlines? We operate according to our commercial plans and we are not supposed to explain to anybody including you. These are our internal matters,” the acting director snapped.

“ATCL can operate with any aircraft which meets airworthiness requirements. What I know is that the Boeing flew to Mwanza last week and it also flew this week,” she further clarified.

When asked as to why the leased aircraft operates once a week while some of the charges such as fees, local transport and hotel bills for the crews accumulate on daily basis and the money to settle them are public funds, Ngocho responded:

“It doesn’t matter how many times the plane operates a week. It can be once, twice or otherwise. It depends on our plans. If the crew members are still in the country then there is work for them to do.”

She also accused this paper and the reporter of publishing information aimed at ‘sabotaging’ ATCL.

“A score of ATCL staff and I share the sentiment the airline is not at your heart as you are one of the people wishing this company to collapse,” she declared.

This paper has written extensively on the national carrier revealing to the public a number of issues on airline operations.

In October 2012 an exclusive report by this paper showed that the leased Boeing 737-200 would cost Sh1billion in three months, the duration for the lease agreement.

Another report on October 28, 2012 queried as to whether the leased plane could survive amid surging fuel prices as it read below;

As Air Tanzania eyes its golden old days with a leased Boeing 737-200 to operate domestic and regional routes, the biggest question is: Can this type of aircraft operate profitably amid surging fuel prices?

According to our survey, some aviation experts reveal stark reality to the contrary; the Boeing 737-200 consumes at least three tons of fuel for a single trip to Mwanza, a moderately short hop of approximately 75 minutes.

To put things in perspective, for a return trip between the two cities (Dar-Mwanza), the leased Boeing 737-200 would be consuming six tons of fuel, not to count other operating costs.

The 737-200 was succeeded in 1984 by the 737-300, a much quieter, larger and more economical aircraft boasting a host of new features and improvements – and whose fuel bill was a comforting 20 percent less than its predecessor.

The airline’s biggest competitor, PrecisionAir, operates a fleet of those relatively economical 737-300 planes for its domestic and regional routes.

At the current fuel price Sh1.6 million per tone (Sh1600 for a single litre of Jet fuel-A1), what these figures mean to ATCL is that the cash-strapped national airline would roughly spend Sh860.76 million within 90 days just by operating one domestic route of Dar-Mwanza.

In monetary values, ATCL would spend Sh4.8 million in fuel just to operate a single flight to Mwanza. If we factor in the leasing fee plus fuel cost without adding all other operational costs, the figures show that within three months, the national airline would dole out nearly Sh2 billion.

Fuel is the most crucial component in the airline business, and aviation experts estimate that it could consume up to 40 percent of its entire revenues – which is why most airlines have been going for fuel-efficient aircraft to curb the surging fuel costs.

In East and Southern Africa, for instance, most airlines have abandoned or replaced their 737-200 with 300, 400, 500 and 800 series to reduce fuel costs – and make sense in business.

The 737-200 can carry at least 106 passengers and crew. Introduced in February 1965, the 737 was originally envisioned as a 60- to 85-seater, before it was improved to accommodate 100 passengers and six crew.

Whereas the leasing fee of $1350 per block hour – with a tied guarantee of 150 block hours a month -- would cost a whopping $202,500 (Sh324 million) a month and $607,500 (Sh972, million) in three months, per diems for nine crew members would cost another 64,800 (103.68 million).  

SOURCE: GUARDIAN ON SUNDAY