5 suitors eye Air Zimbabwe

About five prospective investors have expressed interest in Air Zimbabwe among them the continent's top airline, Ethiopian Airlines.

Ethiopian Airlines, is leading the pack with four other suitors having submitted bids, people familiar with developments told Business Times this week.

Early this year, Ethiopian Airlines offered Air Zimbabwe a lucrative partnership deal that will see the airline bringing planes, training pilots and also assist the national flag carrier to become an aircraft maintenance hub in the SADC region.

The Ethiopian Airlines deal was proposed when the airline's chief executive Tewolde Gebremarian paid a courtesy call on President Emmerson Mnangagwa in Addis Ababa, Ethiopia when the Zimbabwean leader was attending an African Union meeting.

A well-placed source told Business Times that there has been immense interest for a stake in the country's airline with about five concrete bids having been submitted so far amid indications more bidders would come on board.

"Five investors have expressed interest in investing in Air Zimbabwe and they are all being considered. Ethiopian Airlines is among those that expressed interest so all the bids are still being evaluated," said a source.

Air Zimbabwe judicial manager Reggie Saruchera could not be reached for comment.

Air Zimbabwe was last year placed under reconstruction. Under general notice 758 of 2018 published in the Government Gazette, Justice Minister Ziyambi Ziyambi issued a reconstruction order in relation to Air Zimbabwe Limited and Air Zimbabwe Holdings Private Limited.

Air Zimbabwe is one of the country's critical parastatals that government wants revived given its central role in economic turnaround, particularly from the perspective of bringing tourists into the country. Tourism is seen as a low hanging fruit that can help turnaround the economy.

The national carrier is currently saddled with a US$341m foreign and domestic debt which has been accumulated over a decade of mismanagement.

The inability to repay the debt has left the airline in a quandary as it is now stripped of its international aviation privileges.

Air Zimbabwe's passenger numbers have plummeted to about 230 000 per annum in the past few years, from a peak of one million in 1996 with travelers looking for alternative airlines across all the domestic destinations.

The national airline is still in the wilderness where it continues to incur losses. In 2011, Air Zimbabwe's Boeing 737-500 was impounded in South Africa after failing to settle a US$500 000 debt owed to Bid Air Services for ground handling services.

The Boeing 767-200 was also seized by American General Supplies in London over a US$1,2 million debt in the same year. The seizure of the plane resulted in the airline pulling out of the Harare-London route, one of the most profitable routes.

Air Zimbabwe was suspended from International Air Transport Association (IATA), a situation which has made it difficult for Air Zimbabwe to fly to international destinations.

IATA is the trade association for the world's airlines, representing some 275 airlines or 83 percent of total air traffic.

As part of the revival strategy, Transport and Infrastructure Development Minister Biggie Matiza last year noted that Air Zimbabwe and Zimbabwe Airways, will be merged to form one entity as both are state- owned enterprises and will play a critical role towards reviving the country's ailing aviation sector.