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Uncertainty haunts the troubled ATCL

13th September 2009
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ATCL Airbus A320

As Tanzanians ponder the future of cash- strapped Tanzania Railways Limited (TRL), fresh details show that the fate of another state owned firm Air Tanzania Company Limited is still not clear as the company says it wasn’t aware when its two major planes will resume services after undergoing major mechanical checks, technically known as “Check C”.

The news comes at a time when the country is witnessing another state-owned company TRL grappling with financial difficulties as the Indian firm RITES, fails to manage the company. It is understood that the two major planes, Airbus A320 and Boeing 737-200, were grounded since December last year, causing furious reactions from most ATCL workers as well as politicians.

Then in January this year, the two planes were allegedly taken for major maintenance in Mozambique and Mauritius, before one of them was flown to France for major repairs.

The Boeing 737-200 and Airbus A320 were taken to Mozambique and France respectively for a Check C a comprehensive technical maintenance performed approximately every 12–18 months or a specific amount of actual Flight Hours(FH) as defined by the manufacturer. This maintenance check puts the aircraft out of service and requires plenty of space - usually at a hangar at a maintenance base. The schedule of occurrence has many factors and components as has been described, and thus varies by aircraft category and type.

Details from ATCL show that, the Airbus A320 is currently undergoing Check D—the heaviest check for the airplane, also known as a Heavy Maintenance visit (HMV) done approximately after every 4–5 years.

According to aviation experts, this is the check that, more or less, takes the entire airplane apart for inspection. This requires even more space and time than all other checks, and must be performed at a maintenance base. Often, older aircraft being phased out of a particular airlines' fleet are stored or scrapped upon reaching their next check.

Speaking to The Guardian on Sunday yesterday, ATCL acting Chief Executive Officer, William Haji, said the scope of a C check is usually entirely comprehensive, requiring every square inch of the aircraft structure to be inspected and every system serviced, thus causing the delay.

He said the Airbus leased from Wallis Trading Company has accumulated less than one million dollars in service charges contrary to speculations that the total charges amount to $ 12 million.

The acting CEO did not rule out the possibility of the charges increasing as the plane continues to stay for service. “We can not easily say when the planes will come back and how much it will cost, but the two planes will be in the country before the end of the year,” Haji said.

Asked whether the charges will be paid by Air Tanzania or Wallis trading company, he said the contract stipulates that such charges are paid by ATC, failure of which the government which acts as the guarantor has to pay.

ATCL plans to introduce regional routes to South Africa, Entebbe and Comoro upon receipt of the aircrafts. The company currently owns planes that ply local routes.

Meanwhile, the company is still working on its plan to reduce the number of employees as the government holds talks with a Chinese investor on a joint venture.

“It is good to rethink that the number of employees does not match the number of planes. Four planes cannot be served by over 300 people, more so at this time when there are only two planes in the market,” Haji said.

Currently, the company has four planes, including Dash8 with 50 seats and those leased include DASH 8 Q-300, one Airbus 320 which is a 150 seater, and a Boeing 737-200 which is a 104 seater. The last two are out of the country for maintenance.

At first the company decided that all the employees not attached to any plane, after the two planes were flown out should go on unpaid leave, but it was later realised that the move would be illegal. After discussions, both management and employees reached a consensus that it was impossible.

However, the redundancy process, according to Haji, will be based on certain criterion, adding that the company was in dire need of more pilots and engineers taking into consideration the need to have younger people replacing those on the verge of retirement.

But the government has stressed that talks with an Asian investor to take over the management and operations of ATCL are still underway.

The Deputy Minister for Infrastructure Development, Hezekiah Chibulunje said over the phone yesterday, the focus is currently on securing a new strategic investor to run the entity. Without giving details, the deputy minister simply said; “The government is still in talks with the investors and the outcome will be known soon.”

On share ownership, the government would continue holding the majority shares of 51 percent while the new investor China Sanangol International Limited (CSIL) will take the remainder.

For it to compete in the current market, the imminent investor will, among other things, implement ATCL's long-term strategic plan presently pegged at $507.7million (Sh670.1 billion), including buying of nine planes for domestic and international flights, training for pilots and engineers and changing the operating technology system.

Air Tanzania was first leased to South African Airways (SAA) in December 2002 after it won the bid in a tendering process administered by the defunct Presidential Parastatal Sector Reform Commission (PSRC).

SAA planned to create its East African hub in Dar es Salaam to form a ‘Golden Triangle’ between southern, eastern and western Africa.

It was also to replace ATCL's fleet with Boeing 737-800s 737-200 and 767-300s. But on March 31, 2006, the government announced that the company incurred a loss of Sh24.7bn in four years, with TCAA saying the airline was in a worse state than before it was taken over.

SAA blamed the government, saying it failed to release $ 30 million needed to implement the airline`s business strategy and thus reverse the loss-making trend.

On September 7, 2006 the government bought back 49 percent shares and terminated partnership with SAA. It then set aside Sh13bn for completing operation code ATCL 197, instead of 083, changing revenue systems and fuel services, preparing e-ticketing and accounts system, using a new trade mark and clearing outstanding debts.

However, since the new ATCL was launched late 2007, it has failed to improve its shrinking markets in regional routes, due to mainly lack of funding.

SOURCE: GUARDIAN ON SUNDAY
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