Precision Air (PW) continues to operate in the red, but has managed to cut down loss by 60 per cent to 12bn/- for the year ended March 2014, down from 30bn/- last year.PW Board of Directors Chairman, Mr Michael Shirima, told the annual general meeting (AGM) in Dar es Salaam that the focus on the firm’s strategic plan helped to curb losses.
“The measures included review of some routes, abandoning with low contribution to the airline’s revenue,” Mr Shirima said.
He said PW has reduced the size of its fleet from nine to six aircraft, a move that forced it to suspend flights to some destinations including South Africa and Zambia.
PW is listed on the Dar es Salaam Stock Exchange (DSE) and its shares traded at 470/- on Tuesday. However, he said the corresponding savings in costs led improvement in gross margins by 28 per cent in the year under review compared to 18 per cent in 2013 and impressive reduction in loss.
He said competition within the domestic market remained a force to be considered but did not dampen the yields/ revenue passenger kilometers with the measure of the quality of passenger fares uplifted increased by 7 per cent.
Apart from competition, he said security concerns around the globe affected world travel industry, in particular the number of passengers. He said the shilling which continue to struggle against the world major currencies was a major threat to the airline growth.
“The company on average operated at 70 per cent of available fleet capacity and thus lost the opportunity to make higher revenues and reverse the loss trend quicker,” he said.
Mr Shirima noted that although injection of long term capital remained a challenge in the period under review, efforts were underway to secure solution including release of the company assets to get funds for hiring more airctaft and implement other strategic initiatives.
The PW Group Managing Director and Chief Executive Officer Ms Sauda Rajab said the decision to reduce the size of the fleet was appropriate as most of the planes were aged and loss making.
She said by sticking to its strategic plans, the company will then manage to pick up and to continue to command the lion’s share in the domestic aviation industry.
Additionally, she said: “We will focus on improving staff skills, review our network to ensure that the airline operates profitably, control costs to acceptable margins and utilise all the revenue opportunities.
Source: Daily News, reported from Dar es Salaam, Tanzania
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