No respite for Air Tanzania as annual losses soar

Zawya

02-04-2025

Air Tanzania's annual losses have mounted, according to the latest performance record, defying nearly a decade of continued efforts to rescue the national carrier.
The latest report from the Auditor General shows the carrier's losses rose by 62 percent to reach Tshs 91.8 billion ($34.4 million) in the 2023/2024 financial year.
The airline's losses have been on the rise despite nine years of rescue efforts initiated first by the late president John Pombe Magufuli.
However, Air Tanzania Company Ltd (ATCL)'s troubles paled in comparison to the Tanzania Railways Corporation (TRC), another State-owned transportation firm, which posted a Tshs 224 billion ($83.95 million) hole. TRC's losses more than doubled its Tshs 102 billion ($38.23 million) loss from the previous year.
The revelations are contained in a report by the Controller and Auditor General (CAG) Charles Kichere submitted for 2023/2024 year to President Samia Suluhu Hassan at State House in Dar es Salaam on Thursday.
The full details of the report will be made public after it is tabled in parliament on an unspecified later date.
Although they remain regular beneficiaries of government subsidies, TRC and ATCL have consistently been among Tanzania's worst performing public companies in recent years. And according to Mr Kichere, both are still in need of close State supervision if they are to eventually break even.
The railway utility's latest confirmed loss figures were considerably higher than the Tshs 156.77 billion ($60.7 million) with which the National Health Insurance Fund (NHIF) topped the list of loss-making State entities in 2022/2023.
The audit covered the year immediately before Tanzania began operating its new standard gauge railway in June 2024, suggesting the new line could turn around the loss trend for TRC.
The Auditor-General attributed the company's escalating losses to a drop in revenues from the medium gauge railway that is now being slowly phased out along with decaying locomotives, engines and wagons, and prolonged rains which caused the railway to be temporarily shut down too often.
Without a Tshs 29 billion ($10.86 million) government bailout during the course of the year, TRC's losses would have hit Tshs253 billion ($94.82 million), he said.
Air Tanzania's Tshs 91.8 billion ($34.4 million) loss figure for 2023/2024 followed up on Tshs 56.64 billion ($22.19 million) in 2022/2023, which was up almost 32 percent from $15.17 million the year before.
This is despite receiving bailouts of Tshs100 billion ($37.48 million), Tshs 31.55 billion ($12.37 million) and Tshs 30.63 billion ($12.01 million) in each of those years, respectively, to meet overhead costs such as paying staff salaries and running pilot-training programmes.
Read: Air Tanzania adds 737 MAX 9 to its fleet as auditor flags a big hole in its booksAccording to Mr Kichere, the airline was largely bogged down by the grounding of its Airbus fleet for several months during the year in review, due to engine problems which led to significant maintenance costs.
Under an ambitious revival strategy initiated by the late Magufuli in 2016, ATCL has built a stable of 15 planes: Two Boeing 787-8 Dreamliners, two Boeing 737- MAX 9s, four Airbus A220-300s, five De Havilland Dash 8 Q400s, one De Havilland Dash 8-Q300 and one Boeing 767-300F Freighter.
Official Air Tanzania records put the total cost at close to Tshs4 trillion ($1.57 billion). However, the fleet is owned by State-run Tanzania Government Flight Agency (TGFA), which oversees all purchases. Air Tanzania operates them under a strict lease arrangement that it has in the past described as detrimental to its chances of doing profitable business.
Other state firms that CAG Kichere cited over rising losses in his briefing to President Samia on Thursday included the Tanzania Telecommunications Corporation (TTCL) and Tanzania Posts Corporation (TPC).
TTCL incurred a Tshs 27.7 billion ($10.38 million) deficit against Tshs 19.23 billion ($7.2 million) in 2021/2022 and Tshs 894 million ($335,000) in 2022/2023, while TPC's figure was Tshs 23.3 billion ($8.73 million) compared to just Tshs 1.34 billion ($502,000) in the previous year.
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