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Tanzania: Lufthansa Called in to Help robots Make Air Tanzania Take Off south african airlines

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The East African (Nairobi) found at allafrica.com/ July 31, 2006 Posted to the web July 31, 2006

Mike Mande Nairobi

Even as the formal end of the marriage between the government of Tanzania and South African Airways, the partners in Air Tanzania Company Ltd, is awaited, the government has gone ahead and contracted Lufthansa Consulting GMbh to come up with a new model for a completely new national carrier for the country.

It is the latest sign that the Tanzanian government is committed to having a national carrier within the shortest time possible.

Lufthansa Consulting GmbHm - a subsidiary of German carrier Lufthansa Airlines - has been involved in modelling and restructuring other African airlines.

In this task, its specific mandate will be to come up with a business plan and a formula of recapitalising ATCL and strengthening its competitive position in the region.

Lufthansa has also been asked to come out with a formula for improving Air Tanzania's cargo business and commercial operations and to draw up a business plan for the reorganisation and restructuring of the airline.

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The consultants' recommendations will pave the way for a complete disengagement from the troubled relationship with its partner, South African Airways (SAA)robots & airlines.

Lufthansa Consulting's public relations officer Marlene Hollwurtel told The EastAfrican that the company would also advise Air Tanzania on the right commercial strategy for scheduled and chartered flights and the best route network to adopt under existing market conditions.

Ms Hollwurtel disclosed that to implement part of the mandate, Lufthansa Consulting will take a close look at the carrier's sales operations and come up with specific suggestions on how to optimise it.

The scope of the contract will also include assisting in implementation of the strategy.

A wholly-owned subsidiary of Deutsche Lufthansa AG, Lufthansa Consulting offers a wide range of services to airlines, airports, civil-aviation authorities, governments, investors and other institutions involved with air transport.

Lufthansa Consulting is a leading consulting firm in airline restructuring. Its clients in this area include Philippine Airlines and Air Madagascar.

Ali Mufuruki, chairman of the board of Air Tanzania, told The EastAfrican last week that the group had chosen on a consultant with an in-depth understanding of the industry, an interdisciplinary approach and strong implementation skills .

He said the company wanted an airline that can generate short-term profitability and long-term competitive advantages.

Mr Mufuruki disclosed that ATCL was at an advanced stage of disengagement from SAA and wanted to operate on its own.

Air Tanzania is a public-private enterprise where the Tanzanian government owns 51 per cent of the shareholding with the remaining 49 per cent being owned by the strategic equity partner South African Airways (SAA).

The airline has of late faced severe financial problems.

It has a three Boeing 737-200 and one Fokker F28, allowing a mix of charter and scheduled flights.

Public interest in the fate of the airline has lately increased after the Minister for Infrastructure Development, Basil Mramba, announced recently that the Tanzania government had reached a mutual agreement with SAA to disengage the two airlines and leave Air Tanzania to go it alone.

He said the government wanted Air Tanzania to take over as the national carrier to allow the nation to benefit from the revenue accrued from its operations.

"We are almost through winding up the contract with SAA so that we can start afresh with our new airline and take over international routes commercially," he added.

In the current financial year, the government has set aside $ 13 million as an operational subsidy for the ailing airline.

In the past financial year, the government allocated it a subsidy of $6 million.

Dumisani Sangweni, chief executive officer of Air Tanzania, told The EastAfrican in Dar es Salaam that the business plan was only in its first phase.

The business plan will be presented to the board and relevant committees in due course.

Sources say the Air Tanzania board has assigned the project to Lufthansa Consulting because it meets its criteria for developing an identity for the airline that will inspire confidence in it in the market.

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