News / National
Air Zimbabwe to import spares duty free
28 Apr 2019 at 02:23hrs | Views
ONGOING efforts to turnaround the operations of Air Zimbabwe have received further boost following revelations that Government recently extended the dispensation for the national air carrier to import spares duty free.
Through statutory instrument 92/2019 (Customs and Excise – Duty Rebate for Air Zimbabwe) the Government extended, for the whole of 2019, the existing rebate on engine spares and aircraft components for Air Zimbabwe.
The debt ridden State owned airline was placed under the administration of Grant Thornton with effect from October 4 2018, amid a string of losses, in terms of the Reconstruction of State-Indebted Insolvent Companies Act.
Administrator Reggie Saruchena late last year said Air Zimbabwe revival was possible; promising a turnaround. He said he had previously handled similar challenges. As operational and viability problems mounted at the national airline, Air Zimbabwe's passenger numbers plunged to about 230 000 per annum from a peak of 1 million in 1996.
Air Zim has also been struggling to meet its external obligations resulting in it being suspended from international aviation bodies, whose membership is critical for its global routes.
Air Zim assistant administrator Tonderai Mukubvu told The Sunday Mail Business that extension of rebate was welcome as it reduces the cost of aircraft maintenance.
"The removal of import duty takes away a significant cost of maintenance. For instance, if a spare part costs US$4, it means that this reduces the cost of maintenance by the equivalent of the duty," Mr Mukubvu said in an interview.
"Air Zim spares must all be imported because we do not have any local manufacturer, as such the removal of the duty cuts down on the foreign required to import from wherever since the duty is also charged in forex," he added.
He also said that the extension of the duty rebate on spares and components will enable the airline to save foreign currency.
The airline currently has two functional aircraft; one flying and servicing domestic and regional routes and another currently grounded and undergoing maintenance procedure, C-check.
Delivery of an Embraer ERJ 145 aircraft from the US is expected in the next two weeks to increase its fleet of functional aircraft, making the rebate handy.
Further, reports earlier this month indicated that the airline was due to take delivery of two Boeing 777-200 ERs acquired from Malaysia, as part of efforts to boost its fleet.
Mr Mukubvu said a reduction in the amount of foreign currency required to import critical spares, as Zimbabwe faces forex shortages, will reduce the overall cost of maintenance by an equivalent factor.
Efforts to get comment from Transport and Infrastructural Development Minister Joel Biggie Matiza or his deputy Fortune Chasi were not successful by the time of going to print, as they could be reached on the mobile phones.
However, Mr Mukubvu said the company was operating two aircraft while a third, an Embraer ERJ 145 was expected in Zimbabwe in a fortnight and would also benefit from the import duty rebate on spares and engine components.
Air Zim is saddled with a US$341 million debt accumulated over a decade of mismanagement. The inability to repay debts left the airline unable to meet its obligations to global aviation bodies.
Air Zim is now battling to attain recertification under the International Air Transport Association operational safety audit and European Aviation Safety Agency (EASA) after losing its rights as a result of failing to pay its dues.
IATA is an association of the airlines from across the globe, representing 275 airlines or 83 percent of total air traffic. The association supports many areas of aviation activity and helps to formulate industry policy on critical aviation issues.
One of Air Zimbabwe's long haul aircraft, a Boeing 767-200 was impounded by American General Supplies at Gatwick International Airport in London in December 2011 over debts amounting to $1,2 million.
In 1980, Air Zimbabwe had 18 aircraft flying into 31 destinations but is now limited to Harare-Johannesburg; Harare-Bulawayo and Harare-Victoria Falls routes.
Through statutory instrument 92/2019 (Customs and Excise – Duty Rebate for Air Zimbabwe) the Government extended, for the whole of 2019, the existing rebate on engine spares and aircraft components for Air Zimbabwe.
The debt ridden State owned airline was placed under the administration of Grant Thornton with effect from October 4 2018, amid a string of losses, in terms of the Reconstruction of State-Indebted Insolvent Companies Act.
Administrator Reggie Saruchena late last year said Air Zimbabwe revival was possible; promising a turnaround. He said he had previously handled similar challenges. As operational and viability problems mounted at the national airline, Air Zimbabwe's passenger numbers plunged to about 230 000 per annum from a peak of 1 million in 1996.
Air Zim has also been struggling to meet its external obligations resulting in it being suspended from international aviation bodies, whose membership is critical for its global routes.
Air Zim assistant administrator Tonderai Mukubvu told The Sunday Mail Business that extension of rebate was welcome as it reduces the cost of aircraft maintenance.
"The removal of import duty takes away a significant cost of maintenance. For instance, if a spare part costs US$4, it means that this reduces the cost of maintenance by the equivalent of the duty," Mr Mukubvu said in an interview.
"Air Zim spares must all be imported because we do not have any local manufacturer, as such the removal of the duty cuts down on the foreign required to import from wherever since the duty is also charged in forex," he added.
He also said that the extension of the duty rebate on spares and components will enable the airline to save foreign currency.
The airline currently has two functional aircraft; one flying and servicing domestic and regional routes and another currently grounded and undergoing maintenance procedure, C-check.
Delivery of an Embraer ERJ 145 aircraft from the US is expected in the next two weeks to increase its fleet of functional aircraft, making the rebate handy.
Further, reports earlier this month indicated that the airline was due to take delivery of two Boeing 777-200 ERs acquired from Malaysia, as part of efforts to boost its fleet.
Mr Mukubvu said a reduction in the amount of foreign currency required to import critical spares, as Zimbabwe faces forex shortages, will reduce the overall cost of maintenance by an equivalent factor.
Efforts to get comment from Transport and Infrastructural Development Minister Joel Biggie Matiza or his deputy Fortune Chasi were not successful by the time of going to print, as they could be reached on the mobile phones.
However, Mr Mukubvu said the company was operating two aircraft while a third, an Embraer ERJ 145 was expected in Zimbabwe in a fortnight and would also benefit from the import duty rebate on spares and engine components.
Air Zim is saddled with a US$341 million debt accumulated over a decade of mismanagement. The inability to repay debts left the airline unable to meet its obligations to global aviation bodies.
Air Zim is now battling to attain recertification under the International Air Transport Association operational safety audit and European Aviation Safety Agency (EASA) after losing its rights as a result of failing to pay its dues.
IATA is an association of the airlines from across the globe, representing 275 airlines or 83 percent of total air traffic. The association supports many areas of aviation activity and helps to formulate industry policy on critical aviation issues.
One of Air Zimbabwe's long haul aircraft, a Boeing 767-200 was impounded by American General Supplies at Gatwick International Airport in London in December 2011 over debts amounting to $1,2 million.
In 1980, Air Zimbabwe had 18 aircraft flying into 31 destinations but is now limited to Harare-Johannesburg; Harare-Bulawayo and Harare-Victoria Falls routes.
Source - sundaymail
