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and the economy at large.
Therefore, Government’s announcement this week that it is planning to take over its debt is by far the most phenomenal intervention that could soon open doors to restore viability and change the fortunes of the national carrier. Air Zimbabwe has been saddled with a choking US$140 million debt that has rendered all other efforts to salvage it ineffective.
Initiatives to bring in new investors into the 100-percent Government owned firm have so far hit a brick wall as no sane investor would want to have the trouble of first paying off the huge debts and then recapitalising the airline when they are spoilt for choice when it comes to investment in the aviation industry.
The high debt and the current structure of the company made the airline a difficult sell.
However, a debt-free Air Zimbabwe will naturally become attractive to investors while parallel efforts to restore viability such as right-sizing of staff and acquisition of more planes will carry the day for the airline.
Suppliers in the international aviation industry have also shunned the airline because they are owed millions of dollars. In fact on two occasions the airline had its planes impounded in the United Kingdom and in South Africa over some debts and since then domestic and international flights have been suspended.
This has had adverse effects in terms of availability of air transport for travellers who have had to rely on other airlines such as Kenya Airways, Ethiopian Airlines, South African Airways and British Airways. Of course Zimbabwe benefits from the presence of such airlines in the economy but not to the exclusion of our national carrier.
Furthermore, engineers, pilots and other employees have been on strike on numerous occasions straining Air Zimbabwe’s ability to fly again. The debt, has also seen the airline being suspended from the IATA on a number of occasions, sending a bad message to the international market.
This scenario does not bode well for a country that will next year host the UNWTO general assembly where at least 186 countries are expected to attend. Zimbabwe will be seeking to maximise on the benefits of hosting such a big meeting thus demanding an airline that will offer swift domestic connectivity. Zimbabwe will also be seeking to rebrand itself hence the need to have all systems in place, particularly where Airzim is concerned.
An economy needs a reliable national carrier to link it with the outside world, while an efficient domestic air transport system is a pre-requisite for business.
Reports this week that some visitors intending to travel to Victoria Falls from Harare now have to go via Johannesburg only help illustrate the precarious situation that Air Zimbabwe finds itself in today.
We, therefore, hope that work on the proposed Debt Assumption Bill will be completed soon to enable Government to take over the debt, leaving the airline with a clean sheet.
Only then will Government relinquish part of its stake to interested joint venture partners.
We, however, hasten to add that the assumption of the debt, while being a giant step towards Airzim’s revival, will need to be complemented by other efforts to regularise employment levels.
Presently, the airline employs about 1 400 people and this has been its greatest undoing given the few planes that it operates. Studies and reports have already been conducted on the requisite staffing levels and these should thus be followed through.
The retrenchment exercise has been resisted before but we hope this time common sense will prevail. Furthermore, the airline’s planes are now very old and will need to be replaced while more are purchased to ensure viability.
Lack of good corporate governance has emerged as another weakness at the airline but we want to believe that such issues will be handled decisively with proper management structures and systems put in place to run the potentially lucrative business.
The corporate politics that has haunted the airline for long now should be eliminated if Airzim is to operate along proper business lines.
The presence of other airlines, some of whom have had to increase flights into and out of Zimbabwe amply demonstrate the viability of the local aviation industry. It’s about time the national career enjoyed its share of the cake.
Zimbabwe’s future in terms of tourism and the economy in general looks bright. It is such sore points as Airzim and a few others that need to be sorted out for the country to go to the next level.