The Tanzanian Government may be preparing to pull out of Uganda-based carrier SA-Alliance Air in response to the latter's growing links with South African Airways (SAA) and ahead of the privatisation of flag carrier Air Tanzania (ATC).
Transport minister Ernest Nyanda is to "review" Tanzania's future involvement with the pan-national Africa Joint Air Services agreement, under which Alliance operates. Alliance is 40%-owned by SAA with the rest divided 50:50 between Uganda and Tanzania.
Government sources say Dar es Salaam is worried that the carrier's Tanzanian route rights could jeopardise the privatisation of ATC. Similar rights held by Alliance in Uganda have hit the privatisation of Uganda Airlines, with potential bidders withdrawing and leaving SAA the only interested party.
Without exclusive route rights, ATC - with its fleet of ageing aircraft - is unlikely to prove attractive to investors. Alliance holds the rights to several international ATC destinations, although it operates only to London.
Tanzania is also concerned about the deepening relationship between Alliance and SAA, which codeshares on the former's services. Alliance has never posted a profit and its operating deficit reached $37 million last year.
SAA's move for a 49% stake in Uganda Airlines has been complicated by efforts to delay the sale of stock to Ugandan interests for 12 months and to take management control of the carrier.
Source: Flight International
