By George Taylor with Khalifa Hemed
Published August 27, 2019
Air Tanzania‘s flight TC 209 was about to take off for Dar es Salaam on a 3-hour, 35-minute journey from Johannesburg’s OR Tambo International Airport when authorities in South Africa boarded the Airbus A220-300 and seized it, leaving passengers stranded, on August 23.
Roger Wakefield of Werksmans Attorneys, who represents the farmer, is quoted by AFP as having said that the seizure followed an order granted by the High Court in Johannesburg on August 21.
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The lawyer said his client, a Namibian-born Tanzanian farm owner, had been awarded US$33 million in compensation in the 1990s for his massive, privately-owned bean and seed farm, equipment, 250 cars and 12 small planes seized by the Government of Tanzania in the 1980s but that Tanzania had only paid US$20 million and then declared a prohibited immigrant in Tanzania on what his lawyer called “baseless grounds”.
Wakefield, who AFP says specialises in cross-border disputes, says the outstanding balance of US$16 million has accrued interest over the decades and now stands at US$33 million.
The farmer has been fighting for years to get the outstanding amount.
Wakefield, who told AFP the valued of the seized Airbus A220-300 jet is around US$90 million, said “The only way that the aircraft can now be released is if they pay the debt or if they put up security for the claim.”
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Air Tanzania, to reassure passengers, issued a statement saying: “Air Tanzania profoundly regrets to inform you that we expect flight schedule adjustments. We sincerely apologize for all inconveniences this might cause to your travel plans.”
Running a national airline has been a Herculean task for Tanzania that set up Air Tanzania Corporation on March 11, 1977 after the break up of East African Airways.
In May 1991, Air Tanzania began operating a Boeing 767-200ER that was leased from Ethiopian Airlines, but this aircraft proved to be too large and was returned to the lessor in February 1992. The airline reported a profit of US$650,000 in 1994.
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South African Airways (SAA) purchased a 49 percent stake in Air Tanzania in December 2002 for US$20 million. US$10 million was the value of the government’s shares, and the remaining US$10 million was for the Capital and Training Account for financing Air Tanzania’s proposed business plan.
As the strategic partner, SAA planned to create its East African hub in Dar es Salaam to form a ‘Golden Triangle’ between southern, eastern, and western Africa. It also intended to replace ATCL’s fleet with Boeing 737-800s, 737-200s, and 767-300s. It also planned to introduce regional routes, including routes to the Middle East and West Africa. The government was expected to sell 10 percent of its 51 percent stake to a private Tanzanian investor, thereby reducing the government’s ownership to non-controlling interest in ATCL.
The new Air Tanzania airline was launched on 31 March 2003, offering direct flights between Johannesburg and Dar es Salaam, but also to Zanzibar and Kilimanjaro.
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Air Tanzania recorded a pre-tax loss of almost US$7.3 million in its first year following privatisation. The loss was attributed mainly to the inability to expand the network as quickly and extensively as originally planned. It had been hoped to launch services to Dubai, India, and Europe, but these were delayed as Air Tanzania had only Boeing 737-200s in its fleet. The development of Dar es Salaam as an East African hub for the SAA alliance had also not proceeded as quickly as planned.
After the partnership between Air Tanzania and South African Airways (SAA) was officially terminated, the Tanzanian government set aside TZS 13 billion for Air Tanzania to start using its own ticket stock (number 197) instead of the stock of SAA (number 083), changing revenue systems and fuel services, preparing e-ticketing and accounts systems, using a new trademark, and clearing outstanding debts. President Jakaya Kikwete appointed Mustafa Nyang’anyi, a veteran politician and diplomat ambassador, as the board chairman, and former Parastatal Pensions Fund director general David Mattaka as managing director and chief executive officer.
After more failures to capitalize the carrier and once the talks with China Sonangol International limited fell through, press reports in July 2010 indicated that Air Tanzania was in serious discussions with Air Zimbabwe to establish extensive and substantive management collaborative arrangements. Both airlines were reported to be in search of strategic partners to shore up their operations, which had been in decline over the past decade.
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From 2011 to 2015 the airline was in a constant period of decline, with the airline shutting down operations multiple times due to lack of aircraft. Air Tanzania was effectively grounded in March 2011.
In 2016 and with a new government in place, Tanzania President John Magufuli vowed to restore the airline. In May 2016, the government announced plans to purchase two aircraft during 2016 and two additional aircraft during 2017.[ On 15 September 2016, the president appointed Ladislaus Matindi as director-general of the Air Tanzania Company Limited.
On 8 July 2018, Air Tanzania took delivery of a Boeing 787 Dreamliner, to be deployed on intercontinental flights. All new aircraft operated by the airline is owned by the Government Flight Agency which then leases them to the airline.
Air Tanzania received its first Airbus A220-300, registered as 5H-TCH, in December 2018. The airline became the first African operator of this aircraft type and the fifth airline globally with an A220 family airplane.
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It is this Airbus, used for the Johannesburg to Dar es Salaam flight, that was seized by South African authorities. According to a report on BBC South African officials have not yet commented on why the aircraft was seized, but a retired farmer has said the aircraft was seized because Tanzania’s government had not paid him US$33m (£28.8m) it owes in compensation.
This is also not the first time Air Tanzania has had a plane seized. In 2017, Canadian construction firm Stirling Civil Engineering seized the airline’s new Bombardier Q400 plane in Canada over a US$38 million lawsuit.
The Q400 was released in March 2018 after Tanzania’s prime minister and attorney general negotiated its release. No details were given about the terms of the settlement.
Air Tanzania is wholly owned by the Government of Tanzania. As of 30 June 2011, its share capital was about TSh13.4 billion.
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