I have been prompted to write about Air Tanzania following the release of the Controller and Auditor General (CAG)’s report which, among other findings, disclosed a loss of Sh 191.19 billion during the 2024/25 financial year, bringing the accumulated loss to Sh 748 billion. I will not delve into the causes of this loss, as that is a discussion for another day. My focus here is on an issue that hinges on leasing strategy.
Air Tanzania currently operates a fleet of 16 aircraft, comprising three Boeing 787-8 Dreamliners, two Boeing 737 MAX 9s, one Boeing 767-300 F (cargo), five Dash 8 Q400s and one Dash 8 Q300. In this discussion, I propose that ATCL’s fleet strategy should combine owned and leased aircraft in a way that balances financial stability, operational flexibility and long-term growth.
Given the airline’s current scale and ambitions to expand regionally and intercontinentally, a hybrid fleet structure presents the most practical path forward.
In the short to medium term, Air Tanzania should target a fleet composition of 40–50 per cent owned aircraft and 50–60 per cent leased aircraft. This balance reflects best practice among growing airlines, enabling them to maintain flexibility while gradually building asset ownership. Ownership should be concentrated in core, high-utilisation aircraft, particularly those deployed on stable domestic and regional routes such as Dar es Salaam–Mwanza, Dar es Salaam–Kilimanjaro and key East African destinations. Aircraft such as the Airbus A220 and Dash 8 Q400 are well suited for ownership, as they operate frequently, generate predictable cash flows and have relatively stable maintenance profiles.
On the other hand, leasing should be used strategically to support expansion, route experimentation and risk management. Wide-bodied aircraft such as the Boeing 787 Dreamliner, for example, are better suited to long-haul routes such as Mumbai, Guangzhou or potential European destinations, and should primarily be leased rather than owned. Long-haul routes are inherently volatile and influenced by geopolitical considerations, such as the ongoing tensions involving the United States, Israel and Iran.
Emirates began operations in 1985 with just two aircraft—a Boeing 737 and an Airbus A300, both leased from Pakistan International Airlines. Its early strategy relied heavily on leasing to enable rapid expansion without significant capital constraints. Today, it is one of the world’s largest long-haul airlines, operating a vast wide-bodied fleet, many of which are now owned, although leasing continues to play an important role.
A second pillar of this strategy is the use of sale-and-leaseback arrangements. Under this model, ATCL would acquire new aircraft and subsequently sell them to leasing companies, while continuing to operate them under lease agreements. This approach unlocks capital, improves liquidity and reduces balance sheet pressure, while still enabling fleet modernisation. Airlines such as IndiGo have successfully used this model to grow rapidly while maintaining strong financial discipline.
In conclusion, a balanced mix of owned and leased aircraft would enable Air Tanzania to grow sustainably, compete effectively in the region and avoid the financial strain associated with an overly capital-intensive fleet. The objective is not ownership for its own sake, but rather strategic control, flexibility and resilience in a dynamic aviation market.
