Zimbabwe’s flag carrier, Air Zimbabwe (Airzim), will be in the skies before end of year in a measure targeted at boosting the country’s tourism, Finance minister Mthuli Ncube has said.
The struggling airline – which completed adjudication of bids submitted by three investors that have expressed interest in acquiring its shares last month – was placed under administration in October last year in an effort to revive its fortunes.
Minister Ncube pointed out that Government was eager to ensure the carrier took to the skies before year end.
“I was in Gonarezhou over the holiday . . . but there are two problems. One is that there is no domestic airline to move domestic and foreign tourists into the area.
“Number two, we don’t have enough lodges in the area to accommodate tourists.
“I am just highlighting one issue around tourism where we know that as Government we need to assist, we are going to get our airline up in the air. This year we need to be determined to do this not only to support citizens but also move tourists,” the Treasury Chief said in an interview.
Airzim immediately requires US$45 million to be operational, according to Airzim’s Strategic Turnaround Plan (2018-2020).
It requires US$26 million to settle its foreign debt; US$6 million to buy three Embraer ERJ145 and US$4,6 million for International Air Transport Association clearing house joining fees, among other financial obligations.
“I remain optimistic that the Airline is not beyond redemption and as Government, we are determined to see it back to a robust state,” said Minister Ncube.
According to Airzim assistant administrator Tonderai Mukubvu of Grant Thornton, a comprehensive report on the suitors was due to be submitted to the Ministry of Transport and Infrastructure Development for consideration.
Initially, 10 international investors had expressed willingness to acquire a shareholding in the troubled national flag carrier, but only three eventually submitted bids.
The troubled airline – which owes foreign and domestic creditors millions of dollars – is among State-owned entities, which also include telecoms operators NetOne and TelOne; Chemplex and POSB, that the Government listed for privatisation.
Airzim is operating with a single plane (Boeing 737-200), mainly servicing Harare-Bulawayo and Victoria Falls routes, as well as Harare-Johannesburg and Harare-Dar es Salaam regional routes.
It has two Airbus A320-200, two Boeing 767-200, two Boeing 737-200, British Aerospace 146-200 and an Embraer ERJ-145, which are grounded due to functional deficiencies.
The insolvent airline has a staff complement of over 232 employees at its Harare base, local out stations and regional offices.
It has maintained a large staff headcount despite a depleted fleet.
Earlier this month, Airzim suspended payment of school fees for pilots’ children as part of sweeping restructuring reforms.
The national flag carrier had been advised by the African Development Bank (AfDB) to focus its efforts on optimising routes to reduce operating costs and replace aging high cost planes used on domestic routes with smaller planes that will operate with higher load factors.
According to its 2019 infrastructure report, AfDB said Airzim’s future was uncertain having gone through multiple restructuring exercises dating back to pre-independence.
The airline carries about 180 000 passengers a year, according to 2017 figures, and has been operating at a loss for many years and is saddled with a legacy debt of about US$380 million.
Of this figure, US$30 million is owed to foreign creditors, while US$292 million is government-to-government debt.
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Publish date : 2020-01-16 11:34:31