Sh2.5bn fuel debt stalls ATCL flights
By Mkinga Mkinga and Noela Oyugah
THE CITIZEN
The failure by Air Tanzania Company Ltd (ATCL) to transport its passengers during the past two weeks had been caused by a fuel debt amounting to Sh2.5 billion ($2 million), The Citizen has established.
Of the outstanding debt, $1.2 million was inherited from the previous management that forced BP Tanzania to suspended its services to the airline pending payment of the huge debt. The situation hampered the airline's initiative to operate on areas such as the Dar es Salaam-Johannesburg, Mwanza, Kilimanjaro, Mtwara and Mauritius routes during the past two weeks.
This forced ATCL to transfer its booked passengers to rival airlines like South Africa Airways for Dar-Johannesburg route and PrecisionAir for key local routes.
ATCL chief executive officer David Mattaka told The Citizen on Wednesday that the Government had not honoured its promise to pay part of the debt incurred during the defunct partnership between ATCL and South Africa Airways.According to Mr Mattaka, BP Tanzania Ltd and ATCL had agreed to sustain business under the condition that the latter should pay the debt in installments.
To operate its current routes, ATCL spend over Sh1 billion for fuel per month. Between September and June this year, jet fuel prices at the global market rose by 74 per cent, causing heavy loses not only to ATCL, but the aviation industry as a whole.
According to him, under the new agreement, ATCL will be paying BP about Sh700 million per month. Part of the money will service the outstanding debt and the balance meet current fuel supplies. Earlier, the fuel supplier had demanded ATCL to pay Sh1.1 billion per month to service the debt plus the cost of current fuel supplies.
ATCL operates two Boeings 737-200 and Airbus A320-11 on domestic and regional routes. But aviation experts maintain that with the skyrocketing fuel prices, operating Boeing 737-200 is too expensive. For instance to fly from Dar es Salaam to Kilimanjaro International Airport which, 50 minutes flight, Boeing 737-200 consume 8,000 litres of fuel. According to Mr Mattaka, by operating small planes with a capacity to carry 65 passengers, ATCL saves about Sh4 million for a flight to KIA.
However, for regional routes especially from Dar es Salaam to Johannesburg, us of Airbus A320-11, the airline makes profit as the place consumes a reasonable amount of fuel.