News / National
US$40m Airbus dispute leaves Air Zimbabwe in limbo
05 Aug 2024 at 09:31hrs | Views
Air Zimbabwe is struggling with a substantial financial burden, as highlighted in a recent audit report by Acting Auditor General Rheah Kujinga.
The report, covering 2019 to 2021, reveals that the airline has a US$40 million contingent liability and has faced severe cash-flow issues, with liabilities surpassing assets. The airline reported net losses of US$11.1 million in 2020 and US$15 million in 2019, leading to cumulative losses of US$417.4 million.
The audit particularly emphasizes the financial strain caused by two leased Airbus A320 aircraft. These planes, leased from the Isle of Man, have been problematic and costly, with ongoing claims over their ownership contributing to the US$40 million contingent liability. Efforts to return or decommission these aircraft have been hindered by technical faults and a lack of expertise.
The airline's financial situation is precarious, with accumulated losses of US$115.1 million as of 2021 and current liabilities exceeding assets by US$45.3 million. The report suggests significant doubt about Air Zimbabwe's ability to continue operating. Recommendations from external administrators in 2018 included disposing of or decommissioning much of the fleet to reduce costs, but these measures have yet to be fully implemented.
The report, covering 2019 to 2021, reveals that the airline has a US$40 million contingent liability and has faced severe cash-flow issues, with liabilities surpassing assets. The airline reported net losses of US$11.1 million in 2020 and US$15 million in 2019, leading to cumulative losses of US$417.4 million.
The audit particularly emphasizes the financial strain caused by two leased Airbus A320 aircraft. These planes, leased from the Isle of Man, have been problematic and costly, with ongoing claims over their ownership contributing to the US$40 million contingent liability. Efforts to return or decommission these aircraft have been hindered by technical faults and a lack of expertise.
The airline's financial situation is precarious, with accumulated losses of US$115.1 million as of 2021 and current liabilities exceeding assets by US$45.3 million. The report suggests significant doubt about Air Zimbabwe's ability to continue operating. Recommendations from external administrators in 2018 included disposing of or decommissioning much of the fleet to reduce costs, but these measures have yet to be fully implemented.
Source - the independent
