Precision Air Services Ltd – jostling for position in Tanzanian airspace
Publication date: 1 January 2011
Abstract
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.
Keywords
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.
Citation
Minja, E. (2011), "Precision Air Services Ltd – jostling for position in Tanzanian airspace", , Vol. 1 No. 1. https://doi.org/10.1108/20450621111110483
Publisher
:Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited