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Govt to recapitalise Air Zimbabwe

by Staff reporter
27 Feb 2020 at 12:08hrs | Views
Government will raise capital required for the operations of its 100 percent owned airline, Air Zimbabwe, after failing to secure a capable investor or strategic partner.

As part of the plan by the government to contribute to asset capital, Air Zimbabwe is going to lease two Boeing passenger planes acquired from Malaysia pending re-introduction of direct flights to China and London.

In an interview with Business Times, Air Zimbabwe administrator Regis Saruchera of Grant Thornton said the liquidation of the national carrier was no longer in the horizon following the government's commitment to capitalise the operations.

He said the government has expressed commitment to raise capital for operations of the national airliner while availing assets to boost its fleet.

"Boeing B777 is now part of our assets and another plane is expected in the next four weeks.

Govt has since taken an initiative to capitalise the operations and the issue of liquidation is no longer on the horizon," he said.

"Govt is looking at funding the Air Zimbabwe operations and the issue of equipment for operations is key for any airline company."

Recently Saruchera disclosed that nine companies expressed interest to lease the two Boeing 777-200ER aircraft, which have a carrying capacity of 282 passengers each.

However, it remains unclear whether the lease terms will be either dry lease where cabin crew will not be provided or damp lease, which is also known as Aircraft, crew, maintenance or insurance (ACMI) lease.

ACMI is an arrangement whereby the lessor agrees to provide an aircraft, crew, maintenance and insurance to the lessee in return for payment for the number of hours operated.

The lessee provides fuel and covers airport and overflight charges and any other duties and taxes.

"The national airline will be leasing out the two Boeing 777-200ER aircrafts in the immediate, pending re-introduction of international flights to China and London after developing a robust domestic and regional route network," Saruchera said.

"During the lease period, the airline will embark on training of flight crew, maintenance and ground handling personnel."

Saruchera also indicated that Air Zimbabwe, which was placed under reconstruction in October 2018 to allow it to clear its debts understood to be more than US$35m to foreign creditors and ZWL$260m plans to procure an additional narrow-bodied aircraft using proceeds from the lease of the aircraft.

"Once the issue of operations is sorted government has also promised to then deal holistically with issues of legacy debts," he said.

Government acquired the two Boeing aircrafts four years ago from Malaysia.

Last month, the government took delivery of the first of the two aircraft from Malaysia.

The second aircraft, which is currently undergoing maintenance in Malaysia, is expected to be delivered next month.

Source - businesstimes

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