Govt working on a bill to take over AirZim's US$140 million debt

GOVERNMENT is working on a Debt Assumption Bill that will allow it to take over the national airline, Air Zimbabwe's US$140 million debt. The national airline suspended international flights indefinitely in January after its planes were impounded in South Africa and London over debts while domestic flights were also stopped after workers refused to return to work over salary arrears.

On Tuesday, State Enterprises Regulatory Authority of Zimbabwe executive director Mr Edgar Nyoni said the Ministry of Transport, Communications and Infrastructure Development is working on the Bill.

He said this while giving oral evidence before the Parliamentary Portfolio Committee on State Enterprises and Parastatals.

Government, he said, was making concerted efforts to ensure the national airline resumes operations. This followed concerns raised by the committee's chairperson Larry Mavhima (Zvishavane-Runde) on the operations of the national carrier.
"On Air Zimbabwe the main objective of the ministry (State Enterprises and Parastatals Management) is to restore normalcy and the main issue is debt assumption," he said.

"Cabinet approved debt assumption and the Debt Assumption Bill is being prepared by the line ministry (Transport and Communication)."

Mr Nyoni said the taking over of the debt by Government will be a first step in restoring viability to the national airline that was once rated one of the best in Africa.

He, however, said there should be simultaneous staff reduction if Government's moves were to be successful.

"There should be a staff audit looking at the current equipment operating and current employment levels. Currently the company employs 1 400 people so there could be a possibility of downsizing the workforce," he said.

Air Zimbabwe, said Mr Nyoni, was overstaffed compared to its fleet.

He said the National Handling Service, a subsidiary of Air Zimbabwe Holdings, should be let to operate as a separate entity since its profitability was being affected by its parent company. Mr Nyoni said the ageing fleet was also making Air Zimbabwe uncompetitive on regional and international flights resulting in customers shunning its services and proposed that the company leases modern planes.

"The pricing and marketing strategy is incompatible with the old equipment which is highly cost intensive in terms of fuel consumption, every flight, the company is incurring a debt that is why we talk of leasing new aircraft," he said.

Ronald Ndava (Chiredzi North), however, said it was necessary for Government to reconsider continuously assisting Air Zimbabwe with funding when its fortunes were not improving.