Air Tanzania Carried 1.18 Million Passengers Last Year. It Lost TZS 191 Billion Doing It. Costs Are Growing Faster Than Revenue on Every Single Metric.

The Loss That Doubled in a Year

Air Tanzania recorded a loss of TZS 191.19 billion for the financial year 2024/25. This is a 108 percent increase from the TZS 91.79 billion loss recorded in 2023/24. The accumulated loss position has now reached TZS 748 billion, up from TZS 534 billion the previous year. The government provided TZS 87 billion in subsidies to cover staff costs and operational expenses, up from TZS 70 billion the year before, plus TZS 27 billion in development grant revenue. Even with TZS 114 billion in government support, the airline recorded a TZS 191 billion loss.

The revenue picture is not the problem. Passenger and cargo revenue reached TZS 585 billion, an increase of TZS 124 billion or 27 percent over the previous year's TZS 461 billion. Revenue is growing. The problem is that direct operational costs grew faster, rising from TZS 541 billion to TZS 675 billion. The gap between revenue and direct costs, which should narrow as the airline scales, widened instead. The contribution deficit, the amount by which direct costs exceed revenue before administrative and financial costs are applied, grew from TZS 80 billion to TZS 90 billion.

The cost breakdown is specific. Fuel costs rose from TZS 188 billion to TZS 240 billion, a 28 percent increase driven by international fuel price movements, fleet expansion, and increased flight frequency. Maintenance costs rose from TZS 124 billion to TZS 157 billion, a 27 percent increase attributed to engine management costs, new aircraft maintenance reserves, and major maintenance on Q400 and Boeing 787-8 engines. Staff costs rose from TZS 70 billion to TZS 87 billion, a 24 percent increase driven by headcount growth from 747 to 821 employees, a new pay structure, and increased cabin crew allowances. Financial charges rose from TZS 20 billion to TZS 38 billion, a 90 percent increase driven by lease obligations on newly acquired aircraft.

The Operational Underperformance Behind the Financial Loss

The financial loss is the headline. The operational data underneath it is the structural story. Air Tanzania carried 1,178,025 passengers in 2024/25, which is 84 percent of its planned target of 1,410,359. Load factor, the percentage of available seats filled by paying passengers, reached 63 percent against a planned 67 percent. Available seat kilometres, the standard aviation capacity measure, were 27 percent below plan. Revenue passenger kilometres, the equivalent measure of actual revenue-generating travel, were 32 percent below plan.

Cargo carried was 6,918.7 tonnes, 16 percent below the planned 8,225 tonnes. Cargo revenue reached TZS 39.49 billion, 11 percent below plan despite a 22 percent year-on-year increase. The pattern across every operational metric is the same: year-on-year improvement against 2023/24 actuals, consistent underperformance against 2024/25 targets.

The Boeing 767-300F freighter aircraft presents a specific case study in strategic misalignment. Of 207 cargo flights operated by this aircraft in 2024/25, 75 flights or 36 percent were short-haul of one to three hours duration, and 120 flights or 58 percent were medium-haul of four to six hours. Only 12 flights or 6 percent were long-haul, the eight to thirteen hour category for which this aircraft is designed and on which it generates its optimal economics. Of 169 international cargo flights, 162 carried between 11.3 and 20.4 tonnes against an aircraft capacity of 52 tonnes. The aircraft is being operated at between 22 and 39 percent of its capacity on routes for which it is not optimally designed.

The EU flight ban, which prevents airlines certified by the Tanzania Civil Aviation Authority from operating to European destinations, directly constrains Air Tanzania's ability to deploy this aircraft on the long-haul European routes where its economics would justify its cost structure.

The Market Share Problem

Between 2022 and 2024, as Air Tanzania expanded its fleet and increased its operational capacity, its domestic market share fell from 47 percent to 43 percent. International market share has remained between 9 and 10 percent while foreign carriers operating in Tanzania have grown their shares between 10 and 18 percent. Fleet expansion without market share growth is the most direct indicator of a competitiveness problem that the CAG's operational data documents with precision.

The most consequential finding for Air Tanzania's strategic management is the route profitability data. In the week of May 24 to 30, 2025, 61 percent of flights with load factors above 50 percent still generated negative contribution margins. Some flights operated with zero passengers while continuing to incur direct operating costs. The total negative contribution for that single week was approximately TZS 3.4 billion. An airline in which the majority of flights are unprofitable even at moderate occupancy levels is not an airline with a volume problem. It is an airline with a unit economics problem that requires structural intervention rather than continued expansion.

The government has invested deeply and with genuine conviction in Air Tanzania's expansion. The strategic logic, an East African aviation hub anchored by a national carrier with regional connectivity, is sound. What the CAG's data demands is an honest assessment of whether the current cost architecture, the route network design, the aircraft utilisation model, and the revenue management system are capable of delivering that strategic logic. The TZS 748 billion accumulated loss position suggests that the answer to that question, currently, is no.

Source: Ripoti ya Mwaka ya Mdhibiti na Mkaguzi Mkuu wa Hesabu za Serikali kuhusu Ukaguzi wa Mashirika ya Umma kwa Mwaka wa Fedha 2024/25. March 30, 2026.

Uchumi360 covers business, investment, and economic policy across East, Central, and Southern Africa.

UCHUMI360 | CAG REPORT SERIES — ARTICLE 3 OF 10

Tanzania's Pension Funds Are Owed TZS 1.29 Trillion by the Government. That Debt Has Been Outstanding for Approximately 18 Years. The Workers Whose Savings Are at Stake Do Not Know.

Tanzania's social security system holds the retirement savings of the country's public sector workforce. It is the most direct institutional expression of the social contract between the Tanzanian state and the people who staff its institutions, schools, hospitals, water authorities, and public enterprises. The CAG's 2024/25 audit documents two failures in this system that, taken together, represent the most consequential long-term fiscal risk in the entire report: a government debt to pension funds that has not been serviced for approximately 18 years, and TZS 3.53 trillion in uncollected member contributions that should have been remitted by employers but were not.

The 18-Year Debt

Pension and social security funds administered by Tanzania's social security institutions have outstanding loans to the government and government institutions totalling TZS 1.29 trillion. These loans were extended to the government over a period of approximately 18 years and have not been repaid. The implications are specific and serious. Social security funds lend to generate the returns that fund future pension obligations to their members. A loan that is not serviced is a loan that is not generating returns. A loan that has not been serviced for 18 years is a structural gap in the fund's asset base that accumulates across every year of non-repayment.

The CAG does not describe this as a crisis. It describes it as a condition whose long-term implications for the funds' capacity to meet their obligations warrant urgent government attention. The distinction matters analytically. A pension fund that is currently meeting its payment obligations to retirees may appear solvent at any given point while carrying a structural asset-liability mismatch that becomes visible only when payment obligations scale with an ageing workforce. Tanzania's workforce has been growing. Its public sector pension obligations will grow proportionally.

Beyond the government loan portfolio, TZS 3.53 trillion in member contributions are outstanding from employers who deducted pension contributions from workers' salaries but did not remit them to the funds. TZS 19.32 billion in statutory deductions, including pension contributions, health insurance, and workers' compensation, were not remitted by 13 public institutions in 2024/25, up from TZS 11.89 billion across 10 institutions in 2023/24, a 62 percent increase in a single year. The Dar es Salaam Water and Sewerage Authority alone accounts for TZS 15.85 billion of this total.

The human dimension of these failures is direct. Workers whose pension contributions are deducted from their salaries but not remitted are workers who will discover the gap when they retire or when they attempt to access pension services. Workers whose health insurance contributions are not remitted are workers who may find their coverage invalid when they need it. The CAG's recommendation that affected institutions develop repayment plans in coordination with the pension funds is the minimum administrative response. The structural question of why public institutions are deducting legally mandated contributions and not remitting them, and why this pattern is growing rather than contracting, is the policy question that the data demands.

Tanzania Development Bank: TZS 373 Billion in Mature Debts Unpaid

The Tanzania Development Bank, one of Tanzania's primary development finance institutions, failed to repay TZS 373.14 billion in mature debts during the audit period. The FBME Bank liquidation continues to leave TZS 256.22 billion in verified and confirmed claims from former customers unpaid. One bank exceeded the single borrower limit with a loan of TZS 7.17 billion.

The banking sector findings, taken together with the social security fund findings, describe a financial system in which the state institutions whose primary function is intermediating capital between savers and productive investments are themselves carrying significant unremediated structural weaknesses. A development bank that cannot service its mature debt obligations is a development bank whose capacity to deploy new capital is constrained by its existing liability position.

The Long-Term Fiscal Sustainability Question

Tanzania's investment surge, documented by Tiseza at USD 10.95 billion in approved capital for 2025, is generating a capital deployment challenge that will require functioning financial institutions, reliable pension systems, and solvent public enterprises to manage over the next decade. The CAG's social security and financial sector findings describe institutional foundations that are under stress at the precise moment when the demands placed on them are increasing.

The relationship between pension fund solvency, banking sector health, and Tanzania's Vision 2050 ambition is not abstract. The workers who will staff the factories, operate the infrastructure, and service the investors that Vision 2050 requires are the same workers whose pension contributions are sitting unremitted in public institutions' accounts. The institutions that will channel development capital toward the productive investments Vision 2050 requires are the same institutions whose mature debt obligations are not being serviced. The accountability deficit and the development ambition are not separate stories. They are the same story told from different analytical directions.

Uchumi360 covers business, investment, and economic policy across East, Central, and Southern Africa.