The South African and Tanzanian governments have agreed to end South African Airways’ participation in Air Tanzania (ATCL), the carrier in which it took a minority stake and helped relaunch three years ago.

Talks will begin soon to negotiate the terms of SAA’s exit from ATCL. SAA originally paid $20 million to take a 49% stake in ATCL following its partial privatisation in 2002. SAA subsequently relaunched the carrier in March 2003 in a bid to improve the airline’s fortunes.

But the Tanzanian government was last month reported to have established a committee to investigate ending the link, as the carrier’s fortunes have failed to improve. SAA’s annual report for the year ending 31 March 2005 showed it incurred a R55 million ($8.9 million) loss from its Air Tanzania holding.

The South African government confirms that public enterprises minister Alec Erwin has met his Tanzanian counterpart, Basil Mramba, to discuss the issue of SAA’s “disengagement” from ATCL.

“Agreement was reached to facilitate an expeditious and mutually acceptable disengagement by SAA from ATCL, to secure the expeditious return of aircraft under repair to ATCL and to provide for continued co-operation between the two airlines,” the public enterprises ministry says in a statement.

It adds that negotiations on a share sale will begin soon and will not comment further until terms and conditions have been finalised.

SAA confirms it is “currently communicating with our Ministry of Public Enterprises on the status of the relationship between the ATCL and SAA. The discussions are at a formative stage and it would be inappropriate to speculate on the outcome of the process.”

Source: Flight International