News / National
Air Zimbabwe a tradition of scaring
15 Apr 2011 at 12:15hrs | Views
Air Zimbabwe may collapse if the majority of shareholders do not chip in and re-capitalize the loss- making national carrier, an official said.
The airline is currently saddled with debts amounting to more than 100 million U.S. dollars and has been battling intermittent strikes by pilots since the country adopted multiple currencies in February 2009.
The national carrier's acting chief executive, Innocent Mavhunga, told Xinhua soon after addressing a committee of parliament on the on-going strike by pilots that the national airline could fold if money is not availed to revamp operations at the potentially lucrative carrier.
The Zimbabwe government is the majority shareholder in Air Zimbabwe which has had its financial position severely weakened over the past 10 years by hyperinflation, an aging fleet, reduced route network and over staffing, among other challenges.
"Yes if nothing comes that can happen," Mavhunga told Xinhua when asked if it was possible for the airline to collapse in the same way Zambian Airways collapsed a few years ago.
Zambian Airways collapsed in 2009 after succumbing to huge debts. Creditors took the airline to court and ended up attaching planes, resulting in the instant collapse of Zambian Airways.
Last week, Air Zimbabwe was rescued by the government from having its property attached by retrenched workers it owes money. The government intervened by releasing 400,000 dollars towards payment of the retrenchment packages.
The airline is making a loss of 4 million dollars every month and is currently locked in a wage dispute with striking pilots who are demanding their outstanding salaries and allowances that were stopped in February 2009 at the adoption of multiple currencies.
The three-week strike, which has resulted in the suspension of regional and international flights, has compounded the airline's woes.
The airline has six aircraft that are operational, three Boeing 737, two Boeing 767 and one MA60, with analysts estimating the combined value of the planes is less than 120 million dollars.
But despite the dire financial stress, Mavhunga insisted both the management and the shareholder were committed to revamping operations at the airline, one of the 10 State enterprises earmarked for either privatization or restructuring.
He pointed out that to save the airline from collapse, the government needs to recapitalize it and then look for a strategic partner to invest in the carrier.
"By and large the issue which is critical is the issue of recapitalizing the airline and then look for a strategic partner," Mavhunga said.
He noted that the airline has over the years withdrawn from some routes after failing to withstand pressure from competitors due to unreliability, poor marketing and uncompetitive aircraft.
Meanwhile, the 49 striking pilots remained defiant on Monday and indicated that they will not call off the strike until they are paid at least 4 million dollars.
The Labor Court ruled the strike illegal on Thursday last week but the pilots launched an urgent application against the ruling on the same day.
Speaking before a committee of parliament on Monday, a representative of the pilots, Courage Munyanyiwa, said there were deep-seated problems afflicting the airline and that fundamental changes were required to return the loss making airline to profitability.
"Even if pilots were to work for free for the next 100 years Air Zimbabwe would still make a loss. The problem lies somewhere else. Somebody needs to look at the core causes," Munyanyiwa said.
Nicholas Goche, the minister of transport under whose ambit the airline falls, was quoted by the state-controlled Sunday Mail newspaper at the weekend as saying that the airline needs to be spruced up first before it can attract an investor.
"We have to ensure that we have dealt with all the labor issues at Air Zimbabwe, issues of the airline's mounting debts and old fleet before we can look for a strategic partner who will be interested in Air Zimbabwe," Goche was quoted as saying.
He also said the government was committed to ensuring that Air Zimbabwe does not go under but returns to viability as a matter of urgency.
The airline is currently saddled with debts amounting to more than 100 million U.S. dollars and has been battling intermittent strikes by pilots since the country adopted multiple currencies in February 2009.
The national carrier's acting chief executive, Innocent Mavhunga, told Xinhua soon after addressing a committee of parliament on the on-going strike by pilots that the national airline could fold if money is not availed to revamp operations at the potentially lucrative carrier.
The Zimbabwe government is the majority shareholder in Air Zimbabwe which has had its financial position severely weakened over the past 10 years by hyperinflation, an aging fleet, reduced route network and over staffing, among other challenges.
"Yes if nothing comes that can happen," Mavhunga told Xinhua when asked if it was possible for the airline to collapse in the same way Zambian Airways collapsed a few years ago.
Zambian Airways collapsed in 2009 after succumbing to huge debts. Creditors took the airline to court and ended up attaching planes, resulting in the instant collapse of Zambian Airways.
Last week, Air Zimbabwe was rescued by the government from having its property attached by retrenched workers it owes money. The government intervened by releasing 400,000 dollars towards payment of the retrenchment packages.
The airline is making a loss of 4 million dollars every month and is currently locked in a wage dispute with striking pilots who are demanding their outstanding salaries and allowances that were stopped in February 2009 at the adoption of multiple currencies.
The three-week strike, which has resulted in the suspension of regional and international flights, has compounded the airline's woes.
The airline has six aircraft that are operational, three Boeing 737, two Boeing 767 and one MA60, with analysts estimating the combined value of the planes is less than 120 million dollars.
He pointed out that to save the airline from collapse, the government needs to recapitalize it and then look for a strategic partner to invest in the carrier.
"By and large the issue which is critical is the issue of recapitalizing the airline and then look for a strategic partner," Mavhunga said.
He noted that the airline has over the years withdrawn from some routes after failing to withstand pressure from competitors due to unreliability, poor marketing and uncompetitive aircraft.
Meanwhile, the 49 striking pilots remained defiant on Monday and indicated that they will not call off the strike until they are paid at least 4 million dollars.
The Labor Court ruled the strike illegal on Thursday last week but the pilots launched an urgent application against the ruling on the same day.
Speaking before a committee of parliament on Monday, a representative of the pilots, Courage Munyanyiwa, said there were deep-seated problems afflicting the airline and that fundamental changes were required to return the loss making airline to profitability.
"Even if pilots were to work for free for the next 100 years Air Zimbabwe would still make a loss. The problem lies somewhere else. Somebody needs to look at the core causes," Munyanyiwa said.
Nicholas Goche, the minister of transport under whose ambit the airline falls, was quoted by the state-controlled Sunday Mail newspaper at the weekend as saying that the airline needs to be spruced up first before it can attract an investor.
"We have to ensure that we have dealt with all the labor issues at Air Zimbabwe, issues of the airline's mounting debts and old fleet before we can look for a strategic partner who will be interested in Air Zimbabwe," Goche was quoted as saying.
He also said the government was committed to ensuring that Air Zimbabwe does not go under but returns to viability as a matter of urgency.
Source - Xinhua
