Precision Air founder, Mr Shirima speaks about future of the airline
Precision Air founder, Mike Shirima is
determinedly upbeat at a time when his firm faces tough times. He
established the airline 20 years ago with a twin engine five-seater
plane and remains optimistic that his airline will rise again and return
to the good old days.
Mr Shirima, who is also the chairman of Precision Air board, admits that the past 18 months have been murky and tough. But
he believes his team has the best plans to make the airline profitable again.
He told The Citizen last weekend: "We
have been in some difficulty last year, but let me assure the public and
our customers that we will triumph as we are well on the way to get
back to the glorious airline we have been."
He was responding to the news that the government had rejected the company's plea for financing.(P.T)
Speaking after news that the State had
turned down the airline's request, Mr Shirima said the government was
still conducting due diligence before it could grant the troubled
airline a financial bailout.
A decision has yet to be reached on the precise amount Precision Air should get, but preliminary reports indicate that the airline requested about $32 million mid-this year.
"We are at an advanced stage," Mr Shirima told The Citizen over the phone. "My understanding is that the government is still doing due diligence before making its final decision." He added: "They (government officials) have requested us to furnish them with all key details about our company and we have done so. I am confident that finally we shall have a deal." Mr Shirima appeared shocked by the news that the government had rejected Precision Air's bailout request, adding he had yet to receive official communication to that effect.
Briefing the Parliamentary Committee on natural resources and environment and the Budget Committee on Thursday last week in Dar es Salaam, the minister for Tourism and Natural Resources Khamis Kagasheki, said the government had decided not to bail out the airline because Kenya Airways was the majority shareholder and controlled the airline. But Mr Shirima responded: "KQ holds 42 per cent shares in the airline and the rest is owned by Tanzanians and, therefore, control of the airline is with Tanzanians...KQ doesn't influence or manage the company." Should the government invest in equity, according to Mr Shirima, KQ's shares would drop significantly. "Most of the biggest airlines in the world are posting losses and governments are forced to inject billions of dollars to rescue them," Mr Shirima said. "Precision has taken serious measures to address the situation and we hope to thrive soon."
Kenya Airways posted $127 million in losses last year while South African Airways, one of the largest state-owned airlines in Africa, has not posted profit in the past decade.
Mr Shirima established Precision Air in 1993 with a Piper Aztec. Using Arusha as its base, the airline started off providing charter flights to tourists visiting Serengeti National Park, Ngorongoro Crater, Unguja Island and other tourist attractions in Tanzania.
As customer numbers grew, the airline acquired more equipment and began scheduled flights, maintaining Arusha as its base. In 2003, Kenya Airways—the largest airline in East Africa—acquired 49 per cent shareholding in Precision Air for a cash sum of US$2 million.
In October 2011, Precision floated 30.35 percent shareholding in the airline stock in an Initial Public Offering on the Dar es Salaam Stock Exchange, but the move did not go according to plan. It was the beginning of the airline's current problems, according to Mr Shirima.
Source: http://www.wavuti.com
A decision has yet to be reached on the precise amount Precision Air should get, but preliminary reports indicate that the airline requested about $32 million mid-this year.
"We are at an advanced stage," Mr Shirima told The Citizen over the phone. "My understanding is that the government is still doing due diligence before making its final decision." He added: "They (government officials) have requested us to furnish them with all key details about our company and we have done so. I am confident that finally we shall have a deal." Mr Shirima appeared shocked by the news that the government had rejected Precision Air's bailout request, adding he had yet to receive official communication to that effect.
Briefing the Parliamentary Committee on natural resources and environment and the Budget Committee on Thursday last week in Dar es Salaam, the minister for Tourism and Natural Resources Khamis Kagasheki, said the government had decided not to bail out the airline because Kenya Airways was the majority shareholder and controlled the airline. But Mr Shirima responded: "KQ holds 42 per cent shares in the airline and the rest is owned by Tanzanians and, therefore, control of the airline is with Tanzanians...KQ doesn't influence or manage the company." Should the government invest in equity, according to Mr Shirima, KQ's shares would drop significantly. "Most of the biggest airlines in the world are posting losses and governments are forced to inject billions of dollars to rescue them," Mr Shirima said. "Precision has taken serious measures to address the situation and we hope to thrive soon."
Kenya Airways posted $127 million in losses last year while South African Airways, one of the largest state-owned airlines in Africa, has not posted profit in the past decade.
Mr Shirima established Precision Air in 1993 with a Piper Aztec. Using Arusha as its base, the airline started off providing charter flights to tourists visiting Serengeti National Park, Ngorongoro Crater, Unguja Island and other tourist attractions in Tanzania.
As customer numbers grew, the airline acquired more equipment and began scheduled flights, maintaining Arusha as its base. In 2003, Kenya Airways—the largest airline in East Africa—acquired 49 per cent shareholding in Precision Air for a cash sum of US$2 million.
In October 2011, Precision floated 30.35 percent shareholding in the airline stock in an Initial Public Offering on the Dar es Salaam Stock Exchange, but the move did not go according to plan. It was the beginning of the airline's current problems, according to Mr Shirima.
Source: http://www.wavuti.com
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