Tanzanian's are very retrogressive,i heard that a kenyan living in tanzania is the only eligible participant,as we cry to get foreign investors tz chases them away.

Whose share is being diluted? The Tanzanians or KQ's?

PW is issuing authorized but unissued shares, which will have the effect of reducing KQ and Mr Shirima stakes. KQ will go down from 49% to slightly over 31%.

The objectives of the issue are 1. Capital for fleet renewal and 2. Involvement of TANZANIANS in the airline.

While KQ's holding will be reduced, the effect is that there will be more cash available to PW, meaning the KQ's share will be more valuable in the long run. The effect of the second objective will possibly be more use of the airline by Tanzanians, thereby increasing profits.

Bottom line - it is not a bad thing.

KQ is not cashing out. The shares to be sold are 'new' shares thus diluting KQ & Shirima's stake [Note: I have no idea whether Shirima is selling his shares]

I may be mistaken but I think the idea is per @GG

1. Capital for fleet renewal
2. Involvement of (more) TANZANIANS in the airline (ownership)

Why?

1. Tanzania is HUGE. It is tough to move around the country by road so flying is popular (for those who can afford it).
2. Tanzanians are xenophobic about Kenyans. The dead Air Tanzania has been designated a National Airline & the same courtesy was not accorded to 'larger' PW. I do not know the current status.

As a National Airline, PW can access routes subject to bilateral agreements i.e. more destinations are opened.

Many Tanzanians DIRECTLY fly to Dubai, London, etc & they use BA, Emirates, etc but now PW can compete in this market. KQ will lose some traffic but OVERALL the gain is higher to the KQ/PW combo.

Another advantage is that if there is a delay on a KQ flight from Dubai-Nairobi, you can use PW from DBX-DSM-NBO instead of being 'stuck' in Dubai or being put on Emirates.

PW can pass too..last year they made a los...