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Precision Air upbeat as it steadily cuts losses
What you need to know:
- Precision Air, once Tanzania’s most profitable airline, is rebounding as it recovers from the adverse effects of the Covid-19 pandemic
Dar es Salaam. Precision Air, once Tanzania’s fastest-growing and most profitable airline, is rebounding as it recovers from the adverse effects of the Covid-19 pandemic.
The airline’s financial statements show a steady reduction in operating losses, suggesting that its balance sheet could soon stabilise and return the airline to its former profitability.
In 2023, Precision Air registered an operating loss of Sh2.9 billion, a sharp contrast to the operating profit of Sh25.6 billion posted in 2022.
However, a detailed analysis of the company’s financials reveals a consistent decline in losses over the past four years. For example, while the 2023 loss was significant, it was substantially smaller than the staggering operating loss of Sh28.9 billion in 2020.
“This steady reduction shows resilience and upward momentum, particularly post-2020,” said the airline’s CEO, Mr Patrick Mwanri.
Precision Air has also seen an increase in passenger numbers and an improvement in its cabin factor, both of which, according to Mr Mwanri, point to a promising future.
The airline, which is listed on the Dar es Salaam Stock Exchange (DSE), reported a rise in passengers from 470,624 in 2018 to 481,981 in 2023. The drop to 245,875 passengers in 2020 was largely due to the impact of the Covid-19 pandemic.
“This shows significant recovery post-2020, with numbers nearly reaching pre-pandemic levels by 2023,” said Mr Mwanri.
The cabin factor—indicating the percentage of available seats occupied by revenue passengers—also improved. Precision Air’s cabin factor increased from 53 percent in 2018 to 65 percent in 2023, reflecting better seat occupancy and a more efficient use of capacity.
Revenue has risen as well, despite the challenges posed by the pandemic. In 2023, the airline’s revenue increased by 38 percent to Sh134.7 billion, up from Sh97.9 billion in 2018.
Though still operating at a loss, Mr Mwanri remains optimistic that the recovery signals a potential turnaround in the near future.
“Precision Air is poised for a strong turnaround, and we are confident that our strategic initiatives will drive the company back to sustainable growth soon,” he said.
Key focus areas for the airline’s recovery include cost optimisation, safety prioritisation, fleet and route rationalisation, enhanced customer service, and maximising aircraft utilisation to improve operational efficiency. The airline is also investing in smart technologies to boost productivity, streamline processes, and enhance human capital.
Mr Mwanri added that the Tanzanian market holds significant untapped potential for aviation, and Precision Air is well-positioned to capitalise on this opportunity. The recent expansion into new routes, such as Iringa, demonstrates the airline’s commitment to exploring underserved markets.
Supported by the government’s ongoing aviation infrastructure development, Precision Air aims to expand its network and meet passenger and revenue targets more effectively.
“We are also strengthening our Training Centre and Maintenance facilities, not only to improve service quality but also to create additional revenue streams. With these measures in place, we are optimistic about achieving our turnaround goals sooner than anticipated,” he said.
