Just last week, the South African High Court ordered seizure of the Tanzania state carriers Airbus A22-300. Though it was vague as to the reason why, speculation points to a potential $41 million debt that the national airline owes South African Airline from 2017. Tanzania’s ATCL owes SAA $41.1 million from a failed JV since 2006 or former South African landowners who had their properties seized by Tanzanian Government.
Thomas Chlumecky an Aviation expert advises on his linked in page that aircraft flying internationally for a state carrier are legitimate easy assets for seizure purposes by international creditors.
“I have written several times about several cases, recently Wow Air, Jet Airways, Avianca Brazil, Air Nambia’s A319, to years back Qaddafi’s A340, AirZim B767, etc. I warned these new state airlines in Uganda, Tanzania, Zambia, Guinea, Ghana, Tchad, etc. make sure you have no outstanding international corporate creditors, especially ex-state airlines in the 2nd revival Zambia Airways, Air Uganda, Air Senegal, you risk having the aircraft seized once they land outside your country especially where international law is respected, UK, Singapore, India, South Africa, “ Chlumecky carried on his wall.
Reneging in many legally signed contracts exposes most African state carriers. The seizure can occur at aircraft delivery stage usually or worse still when the aircraft is operating and this has the reputation effect of inconveniencing customers in transit.
Most African nations have either relaunched or bought new aircraft to revamp state carrier operations such as in Malawi, Zambia, Zimbabwe, Tanzania, Botswana to mention but a few. At a time when these African nations grapple with debt burdens directly or indirectly linked to bilateral agreements, the risks of asset seizure is very high for assets operating internationally routes especially for jurisdictions that respect international law. The recent Tanzanian state carrier Airbus seizure could spell jitters in the regional aircraft industry going forward.
Compiled by the BT Research Team
