The Precision Air Story: Who keeps Precision Air flying?
There is a negotiation open in Dar es Salaam.
A private airline owes the Government of Tanzania roughly nine point six million dollars.
The debt is unpaid landing fees and taxes. Money owed on the government’s own airports.
The airline cannot settle the bill in cash. It does not have the cash.
The proposal on the table is that the government take a share of the airline instead. A debt-for-equity conversion. Money owed becomes equity owned. Landing fees become a stake.
The airline is Precision Air. Tanzania’s largest privately owned carrier.
The government being asked to take shares in it also owns Air Tanzania. The state carrier. Precision Air’s principal domestic competitor. The state considering equity in the private airline is the same state that runs the airline that competes with it.
Forty six years before this negotiation, in nineteen seventy nine, a young aircraft performance engineer named Michael Shirima walked out of Air Tanzania.
The reason he later gave was that his warnings about the state carrier’s operational failures were being ignored.
He put his own money into a five seater and started an airline of his own.
The airline he built to prove the state wrong may only survive by becoming partly the state’s.
THE REFUSAL
Michael Ngaleku Shirima was born on the first of January, nineteen forty three, in Rombo. A highland district on the Kenyan border of what was then the Tanganyika Territory, a British trust territory administered from London.
His country would not exist under its current name for another eighteen years. Tanganyika became independent in nineteen sixty one. It merged with Zanzibar in nineteen sixty four and took the name Tanzania. Shirima was twenty one when that happened. He was a young man in a young country.
He trained as an aircraft performance engineer.
Performance engineering is a specific discipline. It is the discipline that keeps a plane where physics says it should be. Weight balanced. Thrust matched to lift. Tolerances held before a runway is committed to. It is not the glamorous end of aviation. It is the end where you check the maths before you check anything else.
He was good at it. He went to work at Air Tanzania Company Limited, the state carrier of the new republic.
Tanzania in the nineteen seventies was a socialist republic under President Julius Nyerere. The state ran the flag carrier. The state ran a great deal else. And inside the state carrier, the young engineer began to file reports on what he was seeing.
He filed them, and he filed them again. The record he later kept says he warned his managers about how the state airline was being run. Its operational failures. Its safety practices. The shortcuts.
Nobody moved. The reports stopped mattering before he did.
In nineteen seventy nine, at the age of thirty six, Michael Shirima quit.
He put the reason in his own memoir, decades later. He could not stand watching a state airline fail on his watch when the people paying for it were the ones flying on it. It was not a career move. There was no rival airline in Tanzania in nineteen seventy nine for him to walk out to.
Then twelve years pass.
There is no company in that gap. No airline. No start-up. No plausible cover story that puts him at the head of a rival carrier in nineteen eighty, or nineteen eighty five, or nineteen eighty nine.
The record does not tell us what he was doing in those twelve years in any detail. What it tells us is that at the end of them he was not the same kind of man he had been at the start. He had walked out of state aviation in his mid thirties. He came back to aviation, but not to the state, in his late forties.
He was thirty six when he walked out. He was forty eight when he came back with a plan. Twelve years is not a decision made in anger. It is a decision made slowly, and made alone.
In January, nineteen ninety one, he incorporated Precision Air Services in Tanzania.
On paper it was a company. On the tarmac it was nothing yet. Incorporation is a filing. It is not an airline.
In nineteen ninety three, two years after the paperwork, he started flying.
One aircraft. A Piper Aztec. A twin-engine five seater. The plane a bush pilot uses when the runway is short and the payload is small. Not a jet. Not a national carrier’s kind of aircraft. A single piston with room for four fare-paying seats behind the pilot.
He based it in Arusha. The town at the foot of Mount Kilimanjaro. The gateway to the Serengeti and to the Ngorongoro Crater. The place where a foreign tourist arriving to see wild animals gets on a small aircraft and is flown into the parks.
He flew charters and he ran crop-spraying. The tourists he moved were on their way into the parks. The fields he sprayed were on the way out of them. One aircraft. Two lines of business. Both dependent on the northern circuit.
That is what Precision Air was at the start. One plane. One man. One safari season.
A refusal that took fourteen years to become an aircraft.
THE SAFARI AIRLINE
The charter business grew.
Scheduled service came in on the back of the tourist trade. Kilimanjaro to Zanzibar. Zanzibar to the parks. The parks back to the coast. Routes that made sense on a tourist itinerary and on nothing else.
Precision Air was not chasing the national ambitions of the state carrier. It was doing the practical business of moving safari clients between the airports the tourism industry actually used. A different kind of airline for a different kind of passenger.
The airline discovered what it was for. It was not for pride. It was for tourists.
And it grew inside a country whose tourism industry, through the nineteen nineties, was growing with it. Tanzania in the nineteen nineties was opening up. Foreign visitor numbers were climbing. The parks were the reason foreigners came. Someone had to fly them in and fly them out.
In two thousand and three, Kenya Airways paid two million dollars for forty nine per cent of Precision Air.
Michael Shirima kept fifty one.
Two million dollars is not a lot of money for an airline stake, even in two thousand and three. What matters here is not the price. What matters is who paid it.
Kenya Airways is a real regional carrier. It had looked at the East African market and made an assessment. Its assessment was that the small charter operator in Arusha, running Piper Aztecs and light turboprops on safari runs, was worth being inside.
That was outside validation of the founder’s judgment. A carrier in one country crossed the border to buy a share of a carrier the neighbouring state had chosen to make no place for. An outside operator, looking in, saw a real airline where the state had seen nothing.
In nineteen seventy nine, the state had ignored Michael Shirima. In two thousand and three, another airline paid to be in business with him.
In two thousand and six, Precision Air became the first Tanzanian airline to pass the IATA Operational Safety Audit.
The IATA Operational Safety Audit is an outside sign-off on what an airline is actually doing, not on what it says it is doing. It is the audit the industry uses to decide whether a carrier’s operation is real. Passing it, first in the country, is a statement about how the airline was actually running.
Scheduled routes expanded across Tanzania and into the region. The fleet grew from Aztecs to turboprops.
The airline that had been one plane on grass in Arusha had a schedule board, a maintenance operation, and a place in the East African aviation map.
In April, twenty eleven, Precision Air converted to a public company.
In October, twenty eleven, it launched an initial public offering on the Dar es Salaam Stock Exchange.
The share price was set at four hundred and seventy Tanzanian shillings. The airline hoped to raise about seventeen and a half million dollars for fleet renewal and general capital purposes.
The market answered halfway. The offer was undersubscribed by more than half.
Seven thousand and fifty six investors participated. The airline raised about seven point four million dollars against the seventeen and a half million it had asked for.
On the twenty first of December, twenty eleven, Precision Air was formally listed on the Dar es Salaam Stock Exchange. Public float, fifteen point eight six per cent.
Precision Air had asked the founder for his money and got it. It had asked a regional carrier for anchor capital and got it. It had asked ordinary Tanzanians to fund the rest, and the ordinary Tanzanians hesitated.
THE FIRST RESCUE
In twenty twelve, a Canadian leasing arrangement financed two ATR forty two six hundred turboprops for the Precision Air fleet.
The vehicle was Antelope Leasing Finance. The money behind Antelope was Export Development Canada. A state-backed Canadian export lender whose job is to move Canadian-manufactured equipment out into markets that could not finance the purchase on their own account.
Two aircraft, on paper. A specific debt, in a specific currency, at a specific date. A debt that would still be on the books thirteen years later. Remember the year and remember the arrangement. Both come back.
The aircraft came. So did the trouble.
By the middle of twenty thirteen, Precision Air was in visible financial distress. A route to Johannesburg, ended the previous September, had been losing money the airline could not absorb.
The route had been a stretch. Southern Africa is not the northern-circuit safari trade. Tanzania to South Africa is a long thin corridor and Precision Air had run it thin. When it stopped, the losses did not.
Reports began to circulate that the company was seeking a government bailout. Roughly thirty two million dollars. To keep flying.
That is twenty years after the first flight from Arusha. The company that had asked the market for money in twenty eleven, and got half of what it asked for, was asking the state for money in twenty thirteen.
The founder who had quit the state carrier in nineteen seventy nine was, in twenty thirteen, waiting to hear whether the same government would keep his airline in the air.
In March, twenty thirteen, Precision Air appointed a new chief executive. Her name was Sauda Rajab.
Sauda Rajab was Tanzania’s first female airline CEO.
She had spent twenty three years at Kenya Airways as General Manager Cargo.
She had built her career on cargo. On the operational, unglamorous, paying end of an airline. Cargo is where an airline finds out whether it can actually run a schedule, because cargo does not forgive missed departures the way a leisure passenger might.
She was hired for one job. To pull the airline back from what the reporting of the day openly called near-collapse.
She served six years. She restructured routes. She cut what could be cut. She held the airline together through a period the sourced record credits her with turning around, partially, on her own effort.
The airline survived her tenure. That is the fact to hold.
In a business where near-collapse is often the antechamber to actual collapse, Precision Air did not collapse in twenty thirteen. A real rescue was hired, and the rescue did what it was hired to do. In the accounts that follow, when Precision Air is still flying, that is why.
In twenty seventeen, the two ATR forty two six hundreds that Antelope had financed in twenty twelve were taken out of service.
From that year, the lease payments on those two aircraft stopped moving. The debt continued to accrue. The creditor in Ottawa did not go away.
In March, twenty nineteen, Sauda Rajab departed Precision Air. Six years after she was hired.
The pack finds no interview and no testimonial from anyone inside Precision Air about what those six years cost the people who ran it. The rescue is there in the record. The cost of running it is not.
She left a company that was still flying. She left a company whose fragility she had not been asked to solve, only to survive.
Precision Air, going into the twenty twenties, was doing exactly that. Surviving, without a settlement of what had made it need rescue in the first place.
THE SHOCKS
On the sixth of November, twenty twenty two, Flight PW four nine four was on final approach to Bukoba Airport, on the western shore of Lake Victoria, in low visibility.
The aircraft was an ATR forty two five hundred. It had come in from Dar es Salaam. On board were forty three people. Thirty nine passengers and four crew.
Approximately five hundred metres short of the runway, the aircraft descended below its glide path and struck the water.
Nineteen of the forty three aboard died. Both pilots drowned in the cockpit before rescue reached them.
The first responders on the water were local fishermen. Not the emergency services. Not the airport. The people who happened to be on the lake.
The final investigation report was released on the eighteenth of January, twenty twenty five. It ran for more than two years, and its conclusions were specific.
It found that the crew had failed to respond to the Enhanced Ground Proximity Warning System. The terrain alert system that is designed to shout at pilots exactly when they are descending toward something they should not be descending toward.
The report found the crew did not respond to those warnings until two seconds before impact.
It cited a breakdown in Crew Resource Management. The flight-deck discipline by which two pilots keep each other honest in a cockpit where either one, on the wrong day, can miss the same signal the other is seeing.
One of the nineteen who died was a British passenger. His family has documented UK legal representation, an inquest, and press coverage.
The other eighteen appear in the record as a collective count and a small government gesture. Their families are not on the record this research found in any comparable form.
The airline that lost that aircraft has four hundred and thirteen employees. Pilots. Cabin crew. Ground staff.
What that November did to them is not on the record this research found. No interview. No testimonial. Nothing.
The balance sheet was already carrying the weight.
The financial trouble that would define Precision Air across the next two years did not begin with the crash. It was there in twenty thirteen, a decade before the crash, when the company had asked the government for a bailout. It was there in twenty seventeen, when the two ATRs went out of service and their debt stopped moving.
The crash is real. It is in this episode. It killed nineteen people. It is not the cause of the numbers on the ledger.
On the ninth of June, twenty twenty three, seven months after the crash, Michael Shirima died in office, aged eighty. He was still chairman of the airline he had founded.
He had lived long enough to see his airline listed. He had lived long enough to see it in distress. He did not live long enough to see the negotiation that would define what came next.
His estate became the single largest shareholder in Precision Air, at forty two point nine one per cent.
In February, twenty twenty four, Export Development Canada sued Precision Air in the United Kingdom High Court.
The claim was for roughly twenty six million dollars. Unpaid rentals and termination fees on the two ATR forty two six hundreds that Antelope had financed in twenty twelve and that Precision Air had grounded in twenty seventeen. A twelve year old debt catching up in a London court.
At the close of the twenty twenty three financial year, Precision Air’s shareholders’ deficit stood at roughly one hundred and eighty five million dollars.
Negative equity of that scale is a specific accounting condition, not a metaphor. It means the company owes more than it owns. If you added up everything Precision Air had — aircraft, cash, receivables, brand — it added up to less than what it owed by roughly one hundred and eighty five million dollars.
Its loans were reclassified as current liabilities under a covenant breach.
In accounting language, the debts were due on demand. In plain language, the creditors could ask for their money back at any moment, and the airline did not have it.
THE RETURN
In October, twenty eleven, seven thousand and fifty six ordinary Tanzanians bought shares in Precision Air at four hundred and seventy shillings each.
Fifteen years later, the airline they bought into has negative shareholders’ equity of roughly one hundred and eighty five million dollars, defaulted loans, and a proposal on the table to hand a stake to the government in exchange for unpaid landing fees. What happened to the money of the seven thousand is not in the public record this research found.
The arithmetic of the current ownership is not complicated. The Michael Shirima estate holds forty two point nine one per cent of Precision Air.
Kenya Airways holds forty one point two three per cent.
That is the position after the twenty eleven listing. Diluted from the forty nine per cent Kenya Airways had bought for two million dollars in two thousand and three, because the listing brought in outside shareholders.
Together, the founder’s estate and the anchor carrier own more than eighty per cent of the airline.
Together, in the market, their stakes are valued at a small fraction of a million dollars. Against a shareholders’ deficit of roughly one hundred and eighty five million dollars. The two founding shareholders of a public company hold stakes the market has priced as if they were almost nothing.
In March, twenty twenty five, reporting began to circulate that Kenya Airways was reviewing its investment in Precision Air.
The word was reviewing. Not exiting. Not doubling down. Reviewing. As of the recording of this episode, whether that review has concluded, and what it concluded, is not on the sourced record. What the anchor carrier does next is one of the things Precision Air itself does not yet know.
In the same period, Precision Air entered active talks with the Government of Tanzania.
The proposal is a debt-for-equity conversion. The airline owes the government roughly nine point six million dollars in unpaid landing fees and taxes on the government’s own airports. The government would take, in exchange, an equity stake in the airline.
The government that is being asked to take that equity is the same government that owns Air Tanzania. Precision Air’s principal domestic competitor.
And it is the same government whose state airline the founder walked out of in nineteen seventy nine because his warnings were being ignored.
In August, twenty twenty five, in the middle of that negotiation, Precision Air took delivery of one ATR seventy two five hundred and one ATR forty two six hundred. Two aircraft. Added to the fleet, to relieve capacity constraints.
Twenty twenty four’s net loss narrowed to about twelve million dollars, from about twenty one million the year before. A smaller loss, not a profit. A stability signal inside a negotiation, not a return to growth.
Three threads are open as of the recording of this episode.
The Export Development Canada High Court suit in London. Outcome not on the record.
The Kenya Airways investment review. Outcome not on the record.
The debt-for-equity conversion with the Government of Tanzania. Not closed.
Harry Kitilya sits as chairperson of Precision Air. Patrick Mwanri is chief executive. The two of them are flying the airline through the negotiation.
The airline that Michael Shirima built to prove the state wrong may only survive by becoming partly the state’s. The record does not yet know whether that is what happens.
In nineteen ninety three, one aircraft. One man. One safari season.
In twenty twenty six, eight aircraft, roughly seven destinations, four hundred and seventy two thousand passengers in a year, and a negotiation that has not closed with the same state the founder walked out of.
What Precision Air is at the end of that negotiation is the question the record hands over rather than answers. Between the walk-out and the negotiation lie thirty three years of flight, one rescue that worked, one aircraft in a lake, and a founder buried inside a story still being written.
This is Asili Africa. Every empire has an origin. See you on the next one.
Key Takeaways
- THE REFUSAL. Michael Ngaleku Shirima was born on the first of January, nineteen forty three, in Rombo.
- THE FIRST RESCUE. In twenty twelve, a Canadian leasing arrangement financed two ATR forty two six hundred turboprops for the Precision Air fleet.
- THE SHOCKS. On the sixth of November, twenty twenty two, Flight PW four nine four was on final approach to Bukoba Airport, on the western shore of Lake Victoria, in low visibility.
- THE RETURN. In October, twenty eleven, seven thousand and fifty six ordinary Tanzanians bought shares in Precision Air at four hundred and seventy shillings each.
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