News / National
Zimbabwe aviation industry faces collapse
03 Sep 2018 at 06:33hrs | Views
THE aviation industry faces collapse, owing to failure by monetary authorities to remit ticket sales to foreign airlines, which have now ballooned to $76 million, making Zimbabwe an unprofitable ticket-issuing destination.
Kenyan Airways was the first airline to pull the plug on Zimbabwe, suspending all ticketing from Zimbabwe, citing foreign currency shortages, which has blighted their fiscal operations.
"In light of the increasing foreign currency repatriation difficulties experienced since 2016, we regret to inform our trade partners that Kenyan Airways is temporarily suspending the distribution of ticketing authority in the Zimbabwe market," the statement read.
Outgoing Transport minister Joram Gumbo said he was aware of the challenges faced by airlines as they try to access their foreign currency, noting that Kenya Airways had written two letters threatening to take drastic action.
"I am not a minister at the moment, but I am aware of the challenges which are faced by airlines, including Air Zimbabwe. It's not like they won't be having the money, but it will be in the banks as bond notes and cannot be repatriated. This becomes an issue for the RBZ (Reserve Bank of Zimbabwe) and Finance minister. We have in the past engaged them with a view of solving this issue," he said.
RBZ governor John Mangudya said efforts were being made to ensure that a solution is found soon.
"We owe IATA (International Air Transport Association) around $80 million in air tickets purchased in Zimbabwe. We are putting in place measures to ensure that the country's arrears to IATA are paid. Kenya Airlines is one of the airlines owed within the debt due to IATA. We have been in constant touch and positive discussion with IATA and its member airlines on the matter," Mangudya said. Zimbabwe is facing an acute foreign currency shortage, which has seen prices of goods soaring over the past few months.
Mangudya introduced a surrogate currency, the bond note, which the government insists is at par with the US dollar, although it has since lost value and is now trading at close to 80% of its value to the dollar.
Fears abound that other airlines could follow suit, leaving business and travellers stranded, thereby affecting President Emmerson Mnangagwa's efforts to open up Zimbabwe for business.
Kenyan Airways was the first airline to pull the plug on Zimbabwe, suspending all ticketing from Zimbabwe, citing foreign currency shortages, which has blighted their fiscal operations.
"In light of the increasing foreign currency repatriation difficulties experienced since 2016, we regret to inform our trade partners that Kenyan Airways is temporarily suspending the distribution of ticketing authority in the Zimbabwe market," the statement read.
Outgoing Transport minister Joram Gumbo said he was aware of the challenges faced by airlines as they try to access their foreign currency, noting that Kenya Airways had written two letters threatening to take drastic action.
"I am not a minister at the moment, but I am aware of the challenges which are faced by airlines, including Air Zimbabwe. It's not like they won't be having the money, but it will be in the banks as bond notes and cannot be repatriated. This becomes an issue for the RBZ (Reserve Bank of Zimbabwe) and Finance minister. We have in the past engaged them with a view of solving this issue," he said.
RBZ governor John Mangudya said efforts were being made to ensure that a solution is found soon.
"We owe IATA (International Air Transport Association) around $80 million in air tickets purchased in Zimbabwe. We are putting in place measures to ensure that the country's arrears to IATA are paid. Kenya Airlines is one of the airlines owed within the debt due to IATA. We have been in constant touch and positive discussion with IATA and its member airlines on the matter," Mangudya said. Zimbabwe is facing an acute foreign currency shortage, which has seen prices of goods soaring over the past few months.
Mangudya introduced a surrogate currency, the bond note, which the government insists is at par with the US dollar, although it has since lost value and is now trading at close to 80% of its value to the dollar.
Fears abound that other airlines could follow suit, leaving business and travellers stranded, thereby affecting President Emmerson Mnangagwa's efforts to open up Zimbabwe for business.
Source - newsday
