Tanzania Plans to Sell Stake in National Airline After Elections

Tanzania’s government is considering selling a stake in the national carrier in a turnaround strategy that may be implemented after a new president is elected next month, said acting Chief Executive Officer Johnson Mfinanga.

State-owned Air Tanzania Corp. is currently restricted to flying a limited number of domestic routes because of inadequate funding to acquire more planes, Mfinanga said in an interview in the commercial capital of Dar es Salaam on Wednesday.

“At the moment we don’t have enough aircraft to compete in the business,” he said. “We are just maintaining our presence while awaiting a final move by government.”

Any decisions on proposals to seek private investment for expansion following a study conducted by the World Bank this year have been delayed until after the national elections set for Oct. 25, Mfinanga said.

Opposition Invests President Jakaya Kikwete, who leads the Chama Cha Mapinduzi party, which has been the dominant political force for more than 50 years since independence, is stepping down after his second term.

The opposition Chama Cha Demokrasia na Maendeleo has criticized the government’s failure to boost the airline’s operations. The party’s presidential candidate, Edward Lowassa, promised at a campaign launch last month that he would invest to make the carrier more competitive if he’s put in office.

“Unfortunately it’s an election year so things are not moving as they should, after the election we shall get the bigger picture,” said Mfinanga. “The level of investment will depend on which partner we get.”

The company in 2011 canceled a plan to buy 10 aircraft from Airbus SAS. The carrier’s fleet currently consists of Bombardier Inc. Dash 8 Q300 and CRJ 200 aircraft, according to Air Tanzania’s website.

The airline has opened itself up to private investment before. In 2006, South African Airways sold back to Tanzania’s government the 49 percent stake it bought in Air Tanzania in 2002, after recording losses. The carrier said in 2010 it was in partnership talks with China Sonangol International Ltd. and other international companies. Source: Bloomberg