Business / Companies
Fresh scandal hits Air Zimbabwe
03 Mar 2014 at 02:52hrs | Views
Government is probing Air Zimbabwe's leasing of an Embraer 50-seat plane, amid fears the embattled airline has lost millions of dollars through a huge fixed monthly rental for the jet.
Impeccable sources at AirZim told The Zimbabwe Mail that the Aircraft Crew Maintenance and Insurance Wet Lease Agreement (ACMI Lease) signed by the national airline and Solenta Aviation (Proprietary) Limited on May 16 2013 in Fourways, South Africa, was lopsided and in favour of the lessor.
The lease of the Brazil-manufactured Embraer ERJ 145 LR 50-seat jet was for an initial period of six months that has since expired, but AirZim is still flying the plane.
The lease price was made up of a refundable deposit of $330 000 and a fixed monthly rental of $204 000 and a variable hourly rate of $1 000 per one block hour to be invoiced separately.
Insiders at AirZim said the monthly rental was too high as comparable lease rates for a similar Ambraer jet, irrespective of hours flown, is about $50 000, that translates to less than a quarter of the charge made to the national airline.
Under a dry lease, the sources said, the jet can be hired for between $80 000 and $120 000 monthly.
AirZim, the sources said, had since paid over $3 million to Solenta Aviation and owed the company about $800 000 in lease rentals, flying hours, flight crew salaries and allowances, among other costs, for the close to 10 months' lease.
Government, the sources said, also wanted to probe the suitability of the jet for domestic routes, with aviation experts saying AirZim should have hired the Canadian-made Bombardier Q400 or the France-manufactured ATR 42 or ATR 72.
AirZim, the sources said, tried in vain to lease directly the planes from their manufacturers because of sanctions against the country.
"ACMI is a technical term used to refer to a wet-lease agreement where an aircraft is supplied ready to fly with crew, maintenance service and required insurance cover," one of the sources said. "Under the terms of the agreement, that expired in October last year, AirZim has already paid over $3 million and is now owing about $800 000, which adds up to about $4 million. That is enough to cover a quarter of the price of a new Embraer."
Aviation experts said the jet cost between $15,2 million and $16 m depending on additionals such as in-flight entertainment.
The sources said AirZim could have leased the jet directly from Brazil at cheaper rentals, but sanctions against the country militated against the move.
Transport and Infrastructural Development ministry permanent secretary Munesu Munodawafa, the sources said, was instrumental in the leasing of the jet, arguing Zimbabwe needed it to service delegates to the United Nations World Tourism Organisation conference held in Victoria in August last year.
The sources said the aircraft was identified through an agent, Track Aviation Associates (Pty) Ltd, who were appointed by AirZim with specific instructions to look for an Embraer ERJ on the market.
Incarcerated AirZim company secretary Grace Pfumbidzayi signed the contract with the agent.
Investigations by The Zimbabwe Mail revealed that Solenta Aviation is owned by brothers Paul and Mark Hurst. The jet leased by Solenta to AirZim was reportedly leased from the Innscor group which is controlled by Mike Fowler, Zed Kuruneris and Zanu PF Mashonaland East chairperson Ray Kaukonde.
Kaukonde last week confirmed that he was part of the group that owns the jet.
"There is a relationship between Solenta and the directors of Innscor and it is true that the aircraft is being leased to AirZim," Kaukonde said.
He, however, denied that they had been paid $3,5m and were owed a lot by AirZim.
"No, no, no, that is wrong, AirZim owes us way less than the figures you are talking about. You should check your facts before writing, I would have given you the figures, but I do not have them with me here," said Kaukonde.
Kuruneris was not available for comment, with his secretary saying he was out of the country. Fowler was also not available for comment.
AirZim spokesperson Shingi Taruvinga last week could not comment on the matter.
"Unfortunately, I cannot comment on these matters for now. All matters relating to AirZim are being handled by the shareholder (government)," said Taruvinga.
Munodawafa has not been picking up his phone since last week.
Transport minister Obert Mpofu on Friday told journalists that he was concerned with lease agreements signed by AirZim.
Without referring specifically to the jet deal, Mpofu said: "We have serious problems with arrangements on the leasing contracts, serious problems with
the pay structure and issues to do with tenders."
AirZim is currently in the middle of a multi-million dollar insurance scam involving Pfumbidzayi and senior managers who were arrested early this month and are languishing in remand custody. They allegedly defrauded the airline.
Impeccable sources at AirZim told The Zimbabwe Mail that the Aircraft Crew Maintenance and Insurance Wet Lease Agreement (ACMI Lease) signed by the national airline and Solenta Aviation (Proprietary) Limited on May 16 2013 in Fourways, South Africa, was lopsided and in favour of the lessor.
The lease of the Brazil-manufactured Embraer ERJ 145 LR 50-seat jet was for an initial period of six months that has since expired, but AirZim is still flying the plane.
The lease price was made up of a refundable deposit of $330 000 and a fixed monthly rental of $204 000 and a variable hourly rate of $1 000 per one block hour to be invoiced separately.
Insiders at AirZim said the monthly rental was too high as comparable lease rates for a similar Ambraer jet, irrespective of hours flown, is about $50 000, that translates to less than a quarter of the charge made to the national airline.
Under a dry lease, the sources said, the jet can be hired for between $80 000 and $120 000 monthly.
AirZim, the sources said, had since paid over $3 million to Solenta Aviation and owed the company about $800 000 in lease rentals, flying hours, flight crew salaries and allowances, among other costs, for the close to 10 months' lease.
Government, the sources said, also wanted to probe the suitability of the jet for domestic routes, with aviation experts saying AirZim should have hired the Canadian-made Bombardier Q400 or the France-manufactured ATR 42 or ATR 72.
AirZim, the sources said, tried in vain to lease directly the planes from their manufacturers because of sanctions against the country.
"ACMI is a technical term used to refer to a wet-lease agreement where an aircraft is supplied ready to fly with crew, maintenance service and required insurance cover," one of the sources said. "Under the terms of the agreement, that expired in October last year, AirZim has already paid over $3 million and is now owing about $800 000, which adds up to about $4 million. That is enough to cover a quarter of the price of a new Embraer."
Aviation experts said the jet cost between $15,2 million and $16 m depending on additionals such as in-flight entertainment.
The sources said AirZim could have leased the jet directly from Brazil at cheaper rentals, but sanctions against the country militated against the move.
Transport and Infrastructural Development ministry permanent secretary Munesu Munodawafa, the sources said, was instrumental in the leasing of the jet, arguing Zimbabwe needed it to service delegates to the United Nations World Tourism Organisation conference held in Victoria in August last year.
Incarcerated AirZim company secretary Grace Pfumbidzayi signed the contract with the agent.
Investigations by The Zimbabwe Mail revealed that Solenta Aviation is owned by brothers Paul and Mark Hurst. The jet leased by Solenta to AirZim was reportedly leased from the Innscor group which is controlled by Mike Fowler, Zed Kuruneris and Zanu PF Mashonaland East chairperson Ray Kaukonde.
Kaukonde last week confirmed that he was part of the group that owns the jet.
"There is a relationship between Solenta and the directors of Innscor and it is true that the aircraft is being leased to AirZim," Kaukonde said.
He, however, denied that they had been paid $3,5m and were owed a lot by AirZim.
"No, no, no, that is wrong, AirZim owes us way less than the figures you are talking about. You should check your facts before writing, I would have given you the figures, but I do not have them with me here," said Kaukonde.
Kuruneris was not available for comment, with his secretary saying he was out of the country. Fowler was also not available for comment.
AirZim spokesperson Shingi Taruvinga last week could not comment on the matter.
"Unfortunately, I cannot comment on these matters for now. All matters relating to AirZim are being handled by the shareholder (government)," said Taruvinga.
Munodawafa has not been picking up his phone since last week.
Transport minister Obert Mpofu on Friday told journalists that he was concerned with lease agreements signed by AirZim.
Without referring specifically to the jet deal, Mpofu said: "We have serious problems with arrangements on the leasing contracts, serious problems with
the pay structure and issues to do with tenders."
AirZim is currently in the middle of a multi-million dollar insurance scam involving Pfumbidzayi and senior managers who were arrested early this month and are languishing in remand custody. They allegedly defrauded the airline.
Source - zimmail
