History
Precision Air was established in 1993 and began as a private charter air transport company but expanded to serve the growing tourist market.[SUP]
[5][/SUP] Scheduled services started in November 1999.[SUP][
citation needed][/SUP]
In 2006, Precision Air became the first Tanzanian airline to pass the
IATA Operational Safety Audit.[SUP]
[6][/SUP]
A loan of about US$5 million was being sought in June 2012 from the
International Finance Corporation, an arm of the
World Bank, to fund fleet expansion.[SUP]
[7][/SUP]
Shareholders
Precision Air was privately owned until 2003, when
Kenya Airways acquired a 49 percent stake, paying US$2 million, weeks after its rival
South African Airways acquired a 49 percent stake in
Air Tanzania for US$ 20 million. The remaining 51 percent was retained by
Michael Shirima, the founder of the airline.[SUP]
[1][/SUP][SUP]
[8][/SUP]
In October 2011, Precision Air floated shares in the airline stock in an
initial public offering on the
Dar es Salaam Stock Exchange, after which Shirima's and Kenya Airways's stakes declined and the new share subscribers owned 15.86 percent.[SUP]
[7][/SUP] As of March 2013, the major shareholders were:[SUP]
[9]
[/SUP][TABLE="class: wikitable, align: center"]
[TR]
[TH="bgcolor: #3D590E"]Name[/TH]
[TH="bgcolor: #3D590E"]No. of Shares[/TH]
[TH="bgcolor: #3D590E"]Interest[/TH]
[/TR]
[TR]
[TD]
Michael Shirima[/TD]
[TD="align: right"]68,857,650[/TD]
[TD="align: right"]42.91%[/TD]
[/TR]
[TR]
[TD]
Kenya Airways[/TD]
[TD="align: right"]66,157,350[/TD]
[TD="align: right"]41.23%[/TD]
[/TR]
[TR]
[TD]Precision Air
Employee Stock Option Plan[/TD]
[TD="align: right"]1,765,300[/TD]
[TD="align: right"]1.10%[/TD]
[/TR]
[TR]
[TD]Other shareholders[/TD]
[TD="align: right"]23,689,500[/TD]
[TD="align: right"]14.76%[/TD]
[/TR]
[TR]
[TD]
Total[/TD]
[TD="align: right"]
160,469,800[/TD]
[TD="align: right"]
100.00%[/TD]
[/TR]
[/TABLE]
Business trends
The trends for the Precision Air group over recent years are shown below. Because it was a private company until 2011, published figures were not generally available before the
initial public offering prospectus[SUP]
[10][/SUP] of 12 September 2011. The figures (as at year ending 31 March) are:[TABLE="class: wikitable"]
[TR]
[TH][/TH]
[TH][/TH]
[TH][/TH]
[TH][/TH]
[TH][/TH]
[TH][/TH]
[TH][/TH]
[/TR]
[/TABLE]
[TABLE="class: wikitable"]
[TR]
[TH][/TH]
[TH]2007[/TH]
[TH]2008[/TH]
[TH]2009[/TH]
[TH]2010[/TH]
[TH]2011[/TH]
[TH]2012[/TH]
[TH]2013[/TH]
[/TR]
[TR]
[TD]Turnover (
TZS m)[/TD]
[TD="align: center"]54,341[/TD]
[TD="align: center"]57,988[/TD]
[TD="align: center"]84,344[/TD]
[TD="align: center"]92,493[/TD]
[TD="align: center"]113,606[/TD]
[TD="align: center"]163,061[/TD]
[TH="align: center"]176,383[/TH]
[/TR]
[TR]
[TD]Profits (
PBT) (TZS m)[/TD]
[TD="align: center"]5,534[/TD]
[TD="align: center"]5,671[/TD]
[TD="align: center"]2,818[/TD]
[TD="align: center"]1,924[/TD]
[TD="align: center"]2,159[/TD]
[TD="align: center"]2,232[/TD]
[TH="align: center"]
−31,383[/TH]
[/TR]
[TR]
[TD]Number of employees[/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"]576[/TD]
[TD="align: center"]657[/TD]
[TD="align: center"]704[/TD]
[TH="align: center"]717[/TH]
[/TR]
[TR]
[TD]Number of passengers ('000)[/TD]
[TD="align: center"][/TD]
[TD="align: center"]465[/TD]
[TD="align: center"]538[/TD]
[TD="align: center"][/TD]
[TD="align: center"]667[/TD]
[TD="align: center"]825[/TD]
[TH="align: center"]896[/TH]
[/TR]
[TR]
[TD]Passenger load factor (%)[/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"]64[/TD]
[TD="align: center"]58[/TD]
[TH="align: center"]62[/TH]
[/TR]
[TR]
[TD]Number of aircraft (at year end)[/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"][/TD]
[TD="align: center"]10[/TD]
[TD="align: center"]10[/TD]
[TD="align: center"]11[/TD]
[TH="align: center"]12[/TH]
[/TR]
[TR]
[TD]
Notes/sources[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="align: center"][SUP]
[10][/SUP][/TD]
[TD="align: center"][SUP]
[9][/SUP][/TD]
[TD="align: center"][SUP]
[9][/SUP][SUP]
[11][/SUP][/TD]
[TD="align: center"][SUP]
[12][/SUP][/TD]
[/TR]
[/TABLE]
Precision Air reported in August 2013 that for the year ending 31 March 2013, its maintenance costs increased to 23.6 billion Tanzanian shillings from 11.9 billion for the previous year. The increase was caused primarily by the high cost of maintaining its Boeing 737 fleet.[SUP]
[13][/SUP]
Published reports in June 2013 indicated that Precision Air had encountered substantial financial difficulties, stemming in part from losses incurred while operating flights to and from Johannesburg, South Africa.[SUP]
[14][/SUP] Those flights ended in September 2012.[SUP]
[15][/SUP]
The Citizen, a Tanzanian newspaper, reported in August 2013 that the airline "desperately" needed a US $32 million bailout package from the Tanzanian government or other non-shareholder sources.[SUP]
[16][/SUP] The airline's problems increased in 2011 because it did not receive the cash that was expected when the airline was listed on the Dar es Salaam Stock Exchange.[SUP]
[16][/SUP] Increasing fuel prices, taxes, and levies plus currency fluctuations and the refusal of minority owner Kenya Airways to contribute capital had also hurt the airline.[SUP]
[16][/SUP]
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