Tanzanian regional Precision Air has launched a far reaching restructuring plan after it swung to a Tanzanian Shilling 30.4 billion ($18.8 million) loss for the year to March 2013.
The Tanzanian regional carrier cut unprofitable routes, axe 144 jobs, terminate “expensive” Boeing 737-300 lease agreements and farm out maintenance and advertising contracts to third parties to reduce costs.
The net loss in its last financial year marks a deterioration on a Tanzanian Shilling 1.2billion profit in the previous year. The Dar es Salaam-based carrier saw revenues grow 8.2% to Tanzanian shillings 176.4 billion but direct cost increased 24% to Tanzanian shillings 176.4 billion due to fuel and increased equipment related costs, it says.
Aircraft maintenance costs doubled to 23.6billion in 2012 due Precision says to the high costs of maintaining its Boeing 737s.
Flightglobal's Ascend Online database shows that Precision Air has already returned all of the 737-300s in its fleet to their lessors, leaving it as an all ATR turboprop operator.
The airline had two 737s on 31 March 2012 with the first parked in February 2013 and returned to its lessor GECAS and subsequently sold to Jetran International in May. The second 737-300 was parked in May and returned to lessor BBAM on 31 May. A third 737-300 was briefly leased between May and July from World Star Aviation.
Precision Air lifted capacity 10% during the year and passenger traffic by 16%. But yield declined by 9.4%. Precision says total passenger numbers grew 8.5% from to almost 900,000 as of March 2013.