News / National
Air Zimbabwe moves in to curb arbitrage
01 Feb 2019 at 15:24hrs | Views
Financially-troubled national airline Air Zimbabwe (AirZim) has instructed its travel agents to start charging in foreign currency for passengers flying into the country as the company seeks to turnaround its fortunes.
A weakening surrogate currency introduced in 2016 has created arbitrage opportunities for passengers with stronger currencies flying in or out of the country using the local airline. Last August, the struggling company was placed under reconstruction after Reggie Saruchera of Grant Thornton was administrator to drive the revival of the airline.
"Air Zimbabwe wishes to advise that with immediate effect, for journeys originating outside the country, tickets should be purchased using the currency of that country of origin or equivalent. This also includes all services such as excess baggage payment which would be settled in the country of service origin," the airline said in a sales bulletin to travel partners.
"However, the above tickets and services can still be purchased locally through Air Zimbabwe offices using the currency of which the service is required."
AirZim immediately requires $45 million to be operational, according to the airline's Strategic Turnaround Plan (2018-20). The airline requires $26 million to settle its foreign debt; $6 million for International Air Transport Association (IATA) clearing house joining fees among other financial obligations. Official documents show that as at December 2017, Air Zim had a domestic debt to the tune of $341 million.
The country's civil aviation authority, CAAZ is owed $44,8 million dating back to 2009 for the provision of airport and air navigation services, while NHS is also owed $24 million for passenger and cargo handling. The debts are negatively impacting on the two companies' operations.
A weakening surrogate currency introduced in 2016 has created arbitrage opportunities for passengers with stronger currencies flying in or out of the country using the local airline. Last August, the struggling company was placed under reconstruction after Reggie Saruchera of Grant Thornton was administrator to drive the revival of the airline.
"Air Zimbabwe wishes to advise that with immediate effect, for journeys originating outside the country, tickets should be purchased using the currency of that country of origin or equivalent. This also includes all services such as excess baggage payment which would be settled in the country of service origin," the airline said in a sales bulletin to travel partners.
"However, the above tickets and services can still be purchased locally through Air Zimbabwe offices using the currency of which the service is required."
AirZim immediately requires $45 million to be operational, according to the airline's Strategic Turnaround Plan (2018-20). The airline requires $26 million to settle its foreign debt; $6 million for International Air Transport Association (IATA) clearing house joining fees among other financial obligations. Official documents show that as at December 2017, Air Zim had a domestic debt to the tune of $341 million.
The country's civil aviation authority, CAAZ is owed $44,8 million dating back to 2009 for the provision of airport and air navigation services, while NHS is also owed $24 million for passenger and cargo handling. The debts are negatively impacting on the two companies' operations.
Source - businesstimes
