Precision Air Reports TSh 57.4bn Loss in 2023

Precision Air Suffers Major Losses Amid Soaring Costs and Currency Pressures

Precision Air has reported a sharp financial downturn for 2023, posting a net loss of TSh 57.4 billion—an alarming reversal from its profit the previous year, according to newly released company filings.

The Tanzanian airline’s worsening financial state has been attributed primarily to a steep surge in administrative costs and significant foreign exchange losses. Despite a year-on-year revenue increase—from TSh 117.7 billion to TSh 134.7 billion—these gains were largely offset by a near sevenfold jump in administrative expenses, which skyrocketed to TSh 16 billion.

Compounding the crisis, the airline suffered a net foreign exchange loss of TSh 35.6 billion. This loss stemmed largely from its obligations tied to US dollar-denominated loans and supplier balances, severely undermining the operational revenue improvements.

As of December 31, 2023, the company’s financial position remained precarious, with current liabilities surpassing assets by TSh 537.5 billion. The shareholders' deficit stood at TSh 491.2 billion, while the total outstanding loans amounted to TSh 435.3 billion.

Despite the dire figures, Precision Air’s CEO, Patrick Mwanri, expressed cautious optimism about the airline’s future.

“Precision Air is poised for a strong turnaround, and we are confident our strategic initiatives will drive sustainable growth in the near future,” said Mr Mwanri.

He outlined a multifaceted recovery plan centered on cost optimisation, a renewed emphasis on safety, rationalisation of the fleet and routes, elevating customer service standards, and maximising aircraft utilisation to improve operational efficiency.

Mr Mwanri also highlighted ongoing investments in smart technologies aimed at enhancing productivity and cited the growing potential of Tanzania’s aviation sector as a key driver for the airline’s recovery.

He pointed to encouraging trends in recent years, noting that from 2018 to 2023, Precision Air demonstrated resilience despite the pandemic. Passenger numbers rose from 470,624 in 2018 to 481,981 in 2023, bouncing back from a low of 245,875 in 2020 during the height of COVID-19-related disruptions.

In addition, the cabin factor—a measure of seat occupancy—improved notably from 53 percent in 2018 to 65 percent in 2023, reflecting a more efficient use of available capacity.

Precision Air’s leadership remains committed to navigating the current challenges and steering the airline toward long-term recovery.