VZCZCXRO7909
PP RUEHDBU RUEHDT RUEHKN RUEHLMC RUEHMJ RUEHMR RUEHPB
DE RUEHDR #1074 2131125
ZNY CCCCC ZZH
P 011125Z AUG 07
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 6549
INFO RUCNCLM/MCC CANDIDATE COUNTRY COLLECTIVE PRIORITY
RUEHNR/AMEMBASSY NAIROBI PRIORITY 0730

C O N F I D E N T I A L DAR ES SALAAM 001074 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/E BYODER, AF/EPS FOR THASTINGS, AF/EB 
ALSO PASS TO MCC FOR MKAVANAGH, GBREVNOV 
ALSO NAIROBI FOR FCS 
 
E.O. 12958: DECL: 07/31/2017 
TAGS: ETRD ECON PGOV BEXP TZ
SUBJECT: BOEING AND AIR TANZANIA: SOMETHING FOUL AFOOT? 
 
 
Classified By: Deputy Chief of Mission D. Purnell Delly for 
reasons 1.4b and d. 
 
¶1. (SBU) SUMMARY: Air Tanzania is currently planning to 
replace its aging fleet with newer, more efficient aircraft, 
and has solicited proposals from Boeing and Airbus.  Post is 
prepared to advocate on Boeing's behalf, and is concerned 
that the two companies be allowed to compete on a level 
playing field without outside influence or corruption. 
Boeing's recent dealings with top officials of the airline 
suggest that the company's fear of outside influence might be 
legitimate. END SUMMARY. 
 
¶2. (SBU) In conversations on July 13 and 20, Rob Faye, 
Regional Director of Sales for Boeing Commercial Airplanes, 
told Ambassador Retzer, DCM, and PolCouns that Air Tanzania 
had recently requested a proposal for the sale of new 
airplanes from Boeing, and Boeing had provided a proposal for 
five aircraft worth $537 million at catalog prices.  In the 
wake of the return of full ownership of Air Tanzania to the 
GOT in early 2006, the airline is in the process of 
reclaiming the operation of numerous services previously 
provided by South African Airways.  Air Tanzania is also 
looking toward expanded routes and toward acquiring a newer, 
more efficient fleet. 
 
¶3. (SBU) Faye stated that because Air Tanzania's current 
fleet of 29-year-old 737s (2 operable planes) is extremely 
expensive to operate and maintain, the airline needs to 
devise a plan to secure newer aircraft if it is to remain 
viable.  He further explained that in addition to the sale of 
new aircraft, which could not be delivered until 2013, Boeing 
can offer Air Tanzania a phased-in plan to lease aircraft and 
a variety of capacity-building services (e.g., designing and 
operating online reservations and ticketing), and can also 
work with the airline to implement a multi-stage plan for 
growth in the next 10-20 years. 
 
¶4. (SBU) Boeing has submitted a request for advocacy through 
the International Trade Administration, and Post is ready to 
bring to bear all tools at our disposal to advocate on 
Boeing's behalf.  Airbus is also active in the Tanzanian 
market, and Post's concern is that the two companies be 
allowed to compete on a level playing field without outside 
influence or possible corruption. 
 
¶5. (C) Faye told the DCM that he had received the unusual 
"suggestion" from David Mattaka, Managing Director and CEO of 
Air Tanzania, that he should consult with a specific 
Tanzanian businessman  (Jitesh Ladwa, Managing Director, 
Indian Ocean Hotels Ltd., and owner of the Golden Tulip 
Hotel, Dar es Salaam) regarding Boeing's proposal to Air 
Tanzania, an indication that Air Tanzania officials may 
intend to profit from whatever deal they conclude. 
 
¶6. (C) COMMENT: Post notes that the Golden Tulip Hotel, which 
Mr. Ladwa owns, was built on a section of oceanfront property 
where development has otherwise been prohibited.  This raises 
questions concerning how permission to build this hotel was 
secured. END COMMENT. 
 
¶7. (SBU)  On July 14, Faye met with Mustafa Salim Nyang'anyi, 
Chairman of the Board of Air Tanzania (and former Tanzanian 
Ambassador to the U.S.).  Faye reports that Nyang'anyi is 
adamant about buying new airplanes (for reasons of both 
economics and personal safety), and has already made payments 
on several turbo prop planes to use for domestic flights to 
Tanzania's smaller airports.  Nyang'anyi has also told Faye 
more than once that the GOT is prepared to guarantee 
financing for Air Tanzania.  The latest we have heard from 
Faye is that Dr. Richard Kamungu, member of the board of Air 
Tanzania, is currently visiting Boeing's operations in 
Seattle, and that CEO David Mattaka has told Boeing that he 
intends to accept Boeing's non-binding proposal.  Boeing has 
told us that they consider the acceptance of their proposal a 
sign that Air Tanzania is serious about the offer, despite 
its non-binding nature. 
RETZER