News / National
Air Zimbabwe missing in action
27 Dec 2023 at 17:26hrs | Views
AIR Zimbabwe, which faces a myriad of problems ranging from mounting debts, ageing aircraft, government interference and poor management, has become a pale shadow of itself as it is failing to make a mark this festive season, at a time when it is supposed to be enjoying brisk business.
The airline is not even dominating domestic routes, showing a drastic fall in fortunes. The company, which inherited 18 aircraft at Independence in 1980, has been hamstrung and is flying only one plane, while some of the planes have been grounded due to regulatory issues.
Air Zimbabwe (Private) Limited was incorporated in terms of the Air Zimbabwe Corporation Act [Chapter 13:02] and the Companies and Other Business Entities Act [Chapter 24:31].
As recent as 2021, the airline was in possession of an Embraer ERJ145 regional aircraft from the US and two Boeing 777-200 ER long-haul jets from Malaysia, bringing the total number of serviceable aircraft to five, with the fleet including a Boeing 767 and a Boeing 737.
Air Zimbabwe's main business is to provide clients with passenger and cargo air transport, aircraft maintenance and technical commercial training courses. However, the company is dismally failing to provide these services effectively.
The airline has also failed to re-open regional and international routes, mainly due to a lack of long-haul aircraft and international aviation licences, with domestic and regional routes now largely dominated by international players such as South Africa's Airlink, Kenyan Airways and RwandAir, among others.
In the past, Air Zimbabwe had scheduled international flights to London and Beijing. Recently, acting Auditor-General Rheah Kujinga exposed the rot at Air Zimbabwe which includes financial books that are in a shambles as well as the failure by the national flag carrier to account for the number of planes under its ownership.
Kujinga revealed there are unaccounted for planes at Air Zimbabwe with a value of over US$30 million. In her report on state-owned enterprises and parastatals for the year ended 31 December 2022, Kujinga said: "During the year ended December 31, 2019, aircraft amounting to US$30 940 000 at cost was recognised in the financial statements. Impairment testing has not been carried out on recognised aircraft despite there being indications of impairment. "Consequently, I was unable to satisfy myself that the aircraft has been recognised at values that do not exceed their recoverable amounts.
"The company has not recognised as its assets several aircrafts that it has either used in the past or currently maintains. This is due to unavailability of information on whether Air Zimbabwe is the rightful owner of the aircraft. Consequently, I was unable to obtain sufficient appropriate audit evidence on the completeness of aircraft recognised and any associated obligations that the company may have."
Kujinga also found that Air Zimbabwe's financial books were not in order as there were variances in money amounting to US$92 million.
"As at the beginning of the year ended December 31, 2019 Air Zimbabwe's opening balances were not agreeing to the prior year financial statement balances. However, management could not provide a justification or correction for the variances in the opening balances amounting to USD92 480 450," said Kujinga's report.
"As such, I could not satisfy myself on the accuracy of the opening balances and determine if any adjustments were necessary to the statement of financial position. Therefore, for all balance sheet balances, valuation and accuracy of them could not be determined."
She also expressed concerns on the existence, completeness and valuation of Air Zimbabwe's inventory. "During the year ended December 31, 2019, inventory amounting to USD18 914 747 was recognised in the financial statements. An inventory count was not performed as at December 31, 2019," reads the report.
"As a result, I was unable to determine whether any adjustments might be necessary in respect of the recorded or unrecorded inventories. I was thus unable to satisfy myself as to the existence, completeness and valuation of the inventories."
She also expressed concerns on the company's senior positions which were held in an acting capacity during the year under review.
There were also under-staffing issues which resulted from the retrenchment exercise that was carried out as part of the reconstruction exercise that the acting Auditor-General also flagged.
The senior posts that were being held in acting capacity were those of the chief executive officer, company secretary, maintenance manager, flight operations manager, human resources manager, finance manager, sales and marketing manager and ground operations and airport services manager.
The company also had more posts without substantive officials that included corporate quality manager, safety and security manager, procurement manager, information technology manager. Kujinga said the risk and implication of it is that decision-making by those in an acting position may be limited to short-term periods.
"The Company's operations may be disrupted due to absence of critical skills. The Company should continue pursuing the issue of filling key vacant posts," said the acting AG.
Air Zimbabwe in the past has been rocked by corruption scandals. In 2015, former Air Zimbabwe chief executive Peter Chikumba and company secretary Grace Pfumbidzayi were found guilty of breaking the airline's rules in 2009 by awarding a US$10 million insurance contract to a local company without issuing a tender.
They were jailed 10 years each. Former Auditor-General Mildred Chiri in 2019 again revealed that Air Zimbabwe could not account for three aircraft.
The airline is not even dominating domestic routes, showing a drastic fall in fortunes. The company, which inherited 18 aircraft at Independence in 1980, has been hamstrung and is flying only one plane, while some of the planes have been grounded due to regulatory issues.
Air Zimbabwe (Private) Limited was incorporated in terms of the Air Zimbabwe Corporation Act [Chapter 13:02] and the Companies and Other Business Entities Act [Chapter 24:31].
As recent as 2021, the airline was in possession of an Embraer ERJ145 regional aircraft from the US and two Boeing 777-200 ER long-haul jets from Malaysia, bringing the total number of serviceable aircraft to five, with the fleet including a Boeing 767 and a Boeing 737.
Air Zimbabwe's main business is to provide clients with passenger and cargo air transport, aircraft maintenance and technical commercial training courses. However, the company is dismally failing to provide these services effectively.
The airline has also failed to re-open regional and international routes, mainly due to a lack of long-haul aircraft and international aviation licences, with domestic and regional routes now largely dominated by international players such as South Africa's Airlink, Kenyan Airways and RwandAir, among others.
In the past, Air Zimbabwe had scheduled international flights to London and Beijing. Recently, acting Auditor-General Rheah Kujinga exposed the rot at Air Zimbabwe which includes financial books that are in a shambles as well as the failure by the national flag carrier to account for the number of planes under its ownership.
Kujinga revealed there are unaccounted for planes at Air Zimbabwe with a value of over US$30 million. In her report on state-owned enterprises and parastatals for the year ended 31 December 2022, Kujinga said: "During the year ended December 31, 2019, aircraft amounting to US$30 940 000 at cost was recognised in the financial statements. Impairment testing has not been carried out on recognised aircraft despite there being indications of impairment. "Consequently, I was unable to satisfy myself that the aircraft has been recognised at values that do not exceed their recoverable amounts.
"The company has not recognised as its assets several aircrafts that it has either used in the past or currently maintains. This is due to unavailability of information on whether Air Zimbabwe is the rightful owner of the aircraft. Consequently, I was unable to obtain sufficient appropriate audit evidence on the completeness of aircraft recognised and any associated obligations that the company may have."
Kujinga also found that Air Zimbabwe's financial books were not in order as there were variances in money amounting to US$92 million.
"As such, I could not satisfy myself on the accuracy of the opening balances and determine if any adjustments were necessary to the statement of financial position. Therefore, for all balance sheet balances, valuation and accuracy of them could not be determined."
She also expressed concerns on the existence, completeness and valuation of Air Zimbabwe's inventory. "During the year ended December 31, 2019, inventory amounting to USD18 914 747 was recognised in the financial statements. An inventory count was not performed as at December 31, 2019," reads the report.
"As a result, I was unable to determine whether any adjustments might be necessary in respect of the recorded or unrecorded inventories. I was thus unable to satisfy myself as to the existence, completeness and valuation of the inventories."
She also expressed concerns on the company's senior positions which were held in an acting capacity during the year under review.
There were also under-staffing issues which resulted from the retrenchment exercise that was carried out as part of the reconstruction exercise that the acting Auditor-General also flagged.
The senior posts that were being held in acting capacity were those of the chief executive officer, company secretary, maintenance manager, flight operations manager, human resources manager, finance manager, sales and marketing manager and ground operations and airport services manager.
The company also had more posts without substantive officials that included corporate quality manager, safety and security manager, procurement manager, information technology manager. Kujinga said the risk and implication of it is that decision-making by those in an acting position may be limited to short-term periods.
"The Company's operations may be disrupted due to absence of critical skills. The Company should continue pursuing the issue of filling key vacant posts," said the acting AG.
Air Zimbabwe in the past has been rocked by corruption scandals. In 2015, former Air Zimbabwe chief executive Peter Chikumba and company secretary Grace Pfumbidzayi were found guilty of breaking the airline's rules in 2009 by awarding a US$10 million insurance contract to a local company without issuing a tender.
They were jailed 10 years each. Former Auditor-General Mildred Chiri in 2019 again revealed that Air Zimbabwe could not account for three aircraft.
Source - newshawks
