Above The Clouds
Tanzania's aviation sector has grown by double digits over the past few years. What are the main drivers behind this successful growth?
We have experienced strong growth of between 12% and 16% recently. The driving force behind this is that Europeans and Westerners know about the tourist attractions in Tanzania. The government has worked extensively in terms of attracting more tourists to Tanzania, and we have more tourists arriving specifically to visit Kilimanjaro, Zanzibar, and Dar es Salaam, the three entry points into the country. Number two is the economic growth of 7.2% the country has experienced. Not many other countries are growing as fast as us, and we have among the highest economic growth rates worldwide. Still, we need to bring in more people, and to appeal more to the business community. Even the accessibility of the attractions within Tanzania, especially in terms of the airports we have constructed, has improved accessibility of attractions.
Where does the Terminal 3 project currently stand, and what are your expectations for the terminal once completed?
Traditionally, foreign or international passengers outnumbered their domestic counterparts, but now domestic passengers are growing with the introduction of fastjet, a low-cost carrier. Today, the breakdown is almost at 50:50. Our intention for Terminal 3 is to dedicate it to international passenger traffic. The existing airport will be dedicated to domestic passengers, while Terminal 1 will be for general aviation, such as private jets. The project is going well. We have a great contractor from the Netherlands, in the form of BAM International. It is a renowned contractor, and we have been working with it on infrastructure. To understand airports, there are two sides to consider: the airside and the landside. The first improvement we did for the airport was on the airside, whereby you can allow your aircraft to land and leave safely. By our standards, airside improvement has been completed, and was undertaken by BAM International in Phase I. Today, airside can accommodate eight planes landing and taking off. Our main customers for the airport are the airlines, ahead of the passengers themselves. We want the airline to land and leave safely. Landside is terminal three. We are currently undertaking improvement of the landside, including the parking of aircraft and passenger access to the terminal. This terminal building is going to increase the capacity of Dar es Salaam Airport from 1.5 million annual passengers to 7.5 million, and will take about 33 months to complete. It should open between February and March 2016 and will be a world-class facility.
What are some investment opportunities that exist now for the Tanzania Airports Authority (TAA)?
The private sector can come and operate in Dar es Salaam Airport. We are open to contract arrangement. In Dar es Salaam, apart from analytical services, there are also land and road services, such as shopping malls and hotels. If someone wants to come and invest in this area, we are willing to sit and talk with them. We are also willing to work with companies at Mtwara Airport, which is strategic for recent gas discoveries, and the new Msalato Airport at Dodoma, the political and capital city of the country. Meanwhile, in terms of airport improvements, there is significant growth potential.
What is the current level of interest from foreign investors in these airports?
There is an influx of investors from North America and the Far East. In response, we have been changing our traditionally bureaucratic system into one more conducive to doing business. We should be more proactive and progressive about receiving foreign investors and FDI, especially given the stable political climate. For example, we used to get seven KLM daily flights via Kilimanjaro, but now have 12 KLM movements here. Soon, we will fly from Kilimanjaro and Dar es Salaam to Amsterdam.
What are your priorities for 2015?
The key priority is to make all regional airports operational 24 hours a day. We used to lack paved runways or infrastructure. If an aircraft needs to go for maintenance checks, the number one consideration is landing and takeoff, and then periodic maintenance. Unpaved runways cause more wear and tear on aircraft, and if you check your fleet every 100 movements on a paved runway, you do so every 50 movements on an unpaved one, which is an added cost. My target is to reduce the costs of operators. The other thing is to provide a 24-hour service. In Tanzania, we operate six-to-six, making for a half day. How can you recover your investment with only half a day? You have to come up with high prices for passengers. However, if you allow them to operate 24 hours, and the airline has to be up 18 hours and down six hours for optimum utilization. In Tanzania, they don't even have 12 hours of operations, but 10. Another area I want to focus on is greater control over immigration. We don't want passengers to be inconvenienced by customs or immigration, and this requires regulatory change. The airport is a gateway to the country; it is the first impression people have of Tanzania, and first impressions last.