AfricaPress-Tanzania: SWISSPORT Tanzania has announced a profit warning drop for at least 25 per cent due to poor business however not due to coronavirus.
This signaling that the firm, its share dropped to 1,440/-to nine-year low, will continue suffering profit loss from market contagion effect of Covid-19.
Swissport said in a statement that its profit expected to drop by at least 25 per cent in 2019 lower than of 2018 after deterioration in revenue from ground handling operations.
“…[This is] mainly due to the cessation of operations by Fastjet and Etihad Airways in Tanzania.
“[Also] the loss of some businesses to the competitions and a significant drop of yield per aircraft handled due to the ongoing price pressure,” Swissport said.
However, analysts have it that the cancellation of most major international airlines due to the pandemic this month will send further revenue decline to Swissport.
This leaves Swissport competing for local airlines of only two—Air Tanzania (ATCL) and Precision Air (PW). The latter is self-handling.
Also, both PW and ATCL have canceled region routes this reducing business to handlers who now will concentrate to domestic flights only.
However, two months ago Swissport and ATCL signed a business partnership where the former will provide ground handling services.
Initially, ATCL had been working with NAS-Dar Airco as the ground handling service provider until January when the company handed over the task to Swissport at Kilimanjaro International Airport (KIA). ATCL has been working with Nas-Dar Airco Company since 2016.
Tanzania Civil Aviation Authority (TCAA) data showed that ATCL had in 2018 the lion’s share of the domestic market-at 22 percent-followed by the self-styled ‘low cost carrier,’ Fastjet Airlines (19.3 percent), which has long gone due to financial woes.
Other domestic airlines (with their percentage of market share in brackets) are Auric Air Services Ltd (19), Precision Air (16.3), Coastal Travels Ltd (8) and ‘others:’ 15.4.
Globally, early this month, the International Air Transport Association (IATA), a trade group, projected a possible hit to worldwide revenues of up to 113billion US dollar this year.
The global revenue loss is one-fifth of last year’s overall revenues and four times higher than IATA estimated in February, when the coronavirus was still believed to be a Chinese problem rather than a global one.
