Business / Companies
Zimbabwe government continues to hunt
26 Mar 2017 at 10:02hrs | Views
GOVERNMENT continues to hunt for a technical partner for national flag carrier Air Zimbabwe, which is saddled with a US$334 million debt, despite recent setbacks in attracting a suitor.
Nine airlines – among them Ethiopian Airlines, Angolan Airlines, Boeing, Emirates – have either been engaged or expressed interest in a partnership.
Until recently, Air Zimbabwe looked close to concluding an arrangement with US-based Boeing, a unit of Airbus Group SE.
Transport and Infrastructure Development Minister Dr Jorum Gumbo told The Sunday Mail Business last week that, "We have nine companies that we have spoken with … Many investors want to come, many people have approached us … but no one is bringing anything concrete," said Dr Gumbo.
The protracted negotiations could be tied to unfavourable conditions in the global aviation sector and economic challenges facing Zimbabwe.
Independent estimates suggest Air Zimbabwe needs US$1 billion to procure new aircraft and service its domestic and foreign debts.
The debts stem from navigation, landing and handling fees; fuel supplies; salary arrears; and rentals.
Air Zimbabwe has two Boeing 767s, one Boeing 737, one MA60 and an Airbus A320 that is being leased from Angola's Sonangol.
Two of the parastatal's long-haul aircraft are undergoing periodic maintenance.
Difficulties in accessing foreign currency have made it difficult to timeously buy spare parts.
Air Zimbabwe officials told the Parliamentary Portfolio Committee on Transport on February 20 that the loss for the year ended December 31, 2016 slimmed 42 percent to US$15 million from US$26 million in the same period a year earlier.
It is envisaged tghat long-haul flights like the Harare-London route will push revenue to US$47 million from US$36 million.
"The best you can do with an airline is to break-even. Look at what is happening with South African Airways, which people say is strong … All other airlines, including Kenya Airways, are struggling. Apart from Ethiopian Airlines … they have more debts than ours despite operating in environments different from ours," said Dr Gumbo.
Ethiopian Airways has been performing relatively well, spurred by an economy that is one of the fastest-growing in the world. The company has increased its routes to around 90 from 69 in 2011.
Conversely, Kenya Airways, which is 27 percent-owned by Air France-KLM, has reported losses over the past four years.
South African Airways largely depends on government loans and guarantees for its survival and has had seven chief executives in three years as losses widen.
SAA is still considered technically insolvent, with its going concern status depending on government guarantees of R19,1 billion.
Source - sundaynews