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Emerald Emerging Markets Case Studies

ISSN: 2045-0621

Online from: 2011

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Precision Air Services Ltd – jostling for position in Tanzanian airspace

Document Information:
Title:Precision Air Services Ltd – jostling for position in Tanzanian airspace
Author(s):Ellinami Minja (Department of Finance, University of Dar es Salaam, Dar es Salaam, Tanzania)
Citation:Ellinami Minja, "Precision Air Services Ltd – jostling for position in Tanzanian airspace", Emerald Emerald Emerging Markets Case Studies, (2011)
Keywords:Aerospace industry, Entrepreneurialism, Finance, General management, Tanzania
Article type:Case study
DOI:10.1108/20450621111110483 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:This case was written part of University of Dar es Salaam Business School (UDBS) Case Writing Project. The information in the case was collected from Precision Air Services Ltd including interviews with Mr Shirima, the founder of the airline. Initial permission has been granted for limited discussion of the case. Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; financial and other recognizable information to protect confidentiality.

Subject area – Finance, entrepreneurship, general management.

Study level/applicability – MBA/Postgraduate.

Case overview – This case is about Precision Air Services, a small profitable airline in Tanzania, which is in the middle of a changing airline industry. In less than ten years, Mr Michael Ngaleku Shirima, the founder and then holding two-thirds of the shares together with an option to buy the remaining one-third, had seen the airline grow to a major player in the domestic market. His plans to expand to regional routes were still on the drawing board when he received a US$2 million cash offer from Kenya Airways, a much larger airline, for a 49 percent equity stake. At the same time, South African Airways – another heavyweight in the African airline industry, was in the process of acquiring a controlling stake in the state-owned Air Tanzania Corporation. To Mr Shirima, giving up a significant stake in an airline he created from scratch was a dilemma. But if that was to be, he was also interested to see that he is getting the right price for his efforts.

Expected learning outcomes – This case can be used to teach elements of merger and acquisition, business valuation, negotiation, strategy (corporate, international, growth), strategic scoping and planning.

Supplementary materials: – Teaching notes.

Icon: Teaching notes.

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