Business / Companies
AirZim boss quits
30 Dec 2010 at 19:54hrs | Views
Air Zimbabwe chief executive officer Peter Chikumba has quit the hot seat in the hemorrhaging national airline which is currently squirming in financial dire straits.
The parastatal is reportedly operating at loss of $2 million a month and has a debt of up to $64 million. AirZim board chairperson Jonathan Kadzura confirmed the development on Wednesday saying: "His contract will be expiring at the end of December and he chose not to renew it. As a board we accepted his position and he is leaving at the end of this month."
Speculation swirled this week Chikumba had been fired, but he denied this in an earlier interview, insisting he was still in charge of the ailing parastatal.
"My position is that of appointment. I do not comment on matters over which the board is supposed to," he said.
"I did not go to the newspapers to announce my appointment. Matters of the CEO are of the board and the ministry to comment on. It will be awkward for me to talk about it to the Press but the board can. I still hold my position as the CEO of Air Zimbabwe."
The development comes as it emerged that some AirZim board members did not want Chikumba's contract renewed accusing him of failing to handle the affairs of the airline, chief among them his failure to effectively deal with the two-week strike by pilots resulting in heavy losses.
As a result of the job action, President Robert Mugabe was forced to travel to the United Nations general assembly in New York in September using a hired crew.
A recent investigation by Parliament unearthed that the national airline was operating on an overdraft, unable to service its planes or retire delinquent debts estimated at $64 million.
The national carrier, one of the 10 parastatals that government plans to sell, has pulled out of 18 routes from 25 and scaled down on the number of flights per week to rationalise operations and contain costs. The airline's fleet has also declined and aged, becoming too costly to maintain.
The issues emerged after the Parliamentary Portfolio Committee on Transport and Infrastructural Development visited AirZim workshops earlier this year.
The portfolio committee also noted that AirZim labour problems with its retrenched workers were a result of delays in implementing the 2004 Strategic Plan.
Briefing parliamentarians, the portfolio committee's chairman Blessing Chebundo, said AirZim urgently needed a strategic partner to overcome funding, debt and operational problems.
The committee was informed that creditors were threatening to cut services if the airline failed to pay.
Chebundo said the committee observed that the airline has a huge debt, which upsets the airline's balance sheet and makes it impossible for it to borrow resulting in the airline having to operate on a cash basis.
He told the house that the airline is in need of urgent capital injection because it incurred huge losses during the period it was denied permission to charge in foreign currency and was operating at a loss of $2 million per month.
The committee also noted that Zimbabwe's suspension from the IATA Clearing House had discouraged passengers from using the airline, hurting viability and aggravating its woes.
The parastatal is reportedly operating at loss of $2 million a month and has a debt of up to $64 million. AirZim board chairperson Jonathan Kadzura confirmed the development on Wednesday saying: "His contract will be expiring at the end of December and he chose not to renew it. As a board we accepted his position and he is leaving at the end of this month."
Speculation swirled this week Chikumba had been fired, but he denied this in an earlier interview, insisting he was still in charge of the ailing parastatal.
"My position is that of appointment. I do not comment on matters over which the board is supposed to," he said.
"I did not go to the newspapers to announce my appointment. Matters of the CEO are of the board and the ministry to comment on. It will be awkward for me to talk about it to the Press but the board can. I still hold my position as the CEO of Air Zimbabwe."
The development comes as it emerged that some AirZim board members did not want Chikumba's contract renewed accusing him of failing to handle the affairs of the airline, chief among them his failure to effectively deal with the two-week strike by pilots resulting in heavy losses.
As a result of the job action, President Robert Mugabe was forced to travel to the United Nations general assembly in New York in September using a hired crew.
A recent investigation by Parliament unearthed that the national airline was operating on an overdraft, unable to service its planes or retire delinquent debts estimated at $64 million.
The issues emerged after the Parliamentary Portfolio Committee on Transport and Infrastructural Development visited AirZim workshops earlier this year.
The portfolio committee also noted that AirZim labour problems with its retrenched workers were a result of delays in implementing the 2004 Strategic Plan.
Briefing parliamentarians, the portfolio committee's chairman Blessing Chebundo, said AirZim urgently needed a strategic partner to overcome funding, debt and operational problems.
The committee was informed that creditors were threatening to cut services if the airline failed to pay.
Chebundo said the committee observed that the airline has a huge debt, which upsets the airline's balance sheet and makes it impossible for it to borrow resulting in the airline having to operate on a cash basis.
He told the house that the airline is in need of urgent capital injection because it incurred huge losses during the period it was denied permission to charge in foreign currency and was operating at a loss of $2 million per month.
The committee also noted that Zimbabwe's suspension from the IATA Clearing House had discouraged passengers from using the airline, hurting viability and aggravating its woes.
Source - Byo24
