Tanzania Airports Authority (TAA) set to float tender for third JNIA handler
Dar es Salaam. The Tanzania Airports Authority (TAA) will next month announce a tender for the third ground handling service provider at Dar es Salaam’s Julius Nyerere International Airport (JNIA). This is expected to further exacerbate competition at Tanzania’s busiest airport, which is currently served by Swissport Tanzania and Nas-Dar Airco.
“All is set for announcement of the tender mid next month,” TAA director general Julius Ndyamukama confirmed to The Citizen in a telephone interview yesterday. At its 28th ordinary board meeting held on May 18, 2019, the Tanzania Civil Aviation Authority (TCAA) approved an application by Celebi Tanzania Aviation Services Ltd for a five-year licence.
The chairman of the company’s board is former Swissport Tanzania chief executive Gaudence Temu.
Mr Temu told The Citizen that the company was ready for the task ahead, and that it had an initial capital of about $7 million (Sh16.1 billion).
The money would be used to purchase equipment for handling customers and aircraft.
“We are ready to compete. We are eagerly waiting for the announcement of the tender,” noted Mr Temu.
Aviation stakeholders are worried that licensing more ground handling service providers at JNIA would lead to a price war.
“Multiple players will cause a price war that will eventually slash TAA’s earnings, which depend on the percentage of ground handlers’ income,” Mr Ndyamukama told The Citizen recently.
Noting that ground handling business had about 24 customers, Swissport Tanzania chief executive officer Mrisho Yassin said the market size was too small to attract a new operator.
“The new operator would intensify competition, forcing market players to cut prices to grab a few available customers,” he warned.
In the recent interview with The Citizen, Mr Yassin said the business has been in a decline trend for two years now and will continue to fall throughout this year.
He predicted that losses would range between $2.5 million (Sh5.75 billion) and $3.5 million (Sh8.05 billion). The free fall of the market is attributed to tactical price dumping.
Nas Dar Airco general manager Miguel Serra shared similar sentiments.
Handling capacity
“With the current passenger traffic handling capacity of eight million per annum, I think it is quite tight to have a third ground handler at JNIA,” he noted.
To regulate prices, TCAA said recently that the regulator would propose to stakeholders the regulations for review before the end of the 2019/20 financial year.
“Current regulations do not give room to the regulator to set price caps,” TCAA economic regulation director Daniel Malanga said.
“We have prepared regulations for review, but we are still studying the industry to establish the facts with regard to possible unfair competition.”
