3 investors eye AirZim
Martin Kadzere Senior Business Reporter
AIR Zimbabwe has completed adjudication of bids submitted by three investors that have expressed interest in acquiring shares in the struggling State-owned airline.
Assistant administrator Tonderai Mukubvu of Grant Thornton told The Herald Finance and Business in an interview that a comprehensive report would be submitted to the Ministry of Transport and Infrastructure Development for consideration.
AirZim was placed under administration in October last year in an effort to revive its fortunes.
Initially, 10 international investors had expressed willingness to acquire a shareholding in the troubled national flag carrier, but only three eventually submitted bids.
“The process of adjudication is complete now; we have made our recommendations based on the bids that we received and also the business models that we think can help turnaround the airline. By end of this week, we will submit our reports to the ministry,” said Mr Mukubvu.
He, however would not be drawn to disclose the three potential suitors citing confidentiality.
The troubled airline, which owes foreign and domestic creditors millions of dollars, is among State-owned entities, which also include telecoms operators NetOne and TelOne; Chemplex and POSB, that the Government listed for privatisation.
Air Zimbabwe is operating with a single plane (Boeing 737-200), mainly servicing Harare-Bulawayo and Victoria Falls routes, as well as Harare-Johannesburg and Harare-Dar es Salaam regional routes. It has two Airbus A320-200, two Boeing 767-200, two Boeing 737-200, British Aerospace 146-200 and an Embraer ERJ-145, which are grounded due to functional deficiencies.
Air Zimbabwe has a staff complement of over 232 employees being the total number of active employees at its Harare base, local out stations and regional offices. It has maintained a large staff headcount despite a depleted fleet.
Last month, Transport and Infrastructure Development Minister Joel Matiza, said a Malaysian firm had cleared the release of two aircraft acquired by Air Zimbabwe. Delivery of the planes is expected before year end.
The two Boeing 777-200 ER are part of four planes the national airline intends to buy. Last year, Government, entered into an agreement to acquire aeroplanes from Malaysia for US$70 million.
Air Zimbabwe is also finalising regulatory issues to start flying the Embraer ERJ145 purchased from the US. The plane was delivered in April this year.
The 50-seater jet has to go through the local registration process as well as all mandatory checks, tests and certification before it is put into service, the Air Zimbabwe administrator said.
The aircraft is expected to mostly service local and regional routes.
Improved air connectivity is critical to Zimbabwe at a time the southern Africa country is on the drive to attract foreign direct investment as well as enhance tourist arrivals. Other regional airlines have taken advantage of improved tourist arrivals, particularly in Victoria Falls following the upgrade and expansion of Victoria Falls International Airport.
This also comes at a time Harare is upgrading Robert Mugabe International Airport, which will include expansion of the international terminal building and aprons, installation of four new air bridges, a secondary radar system, the airfield ground lighting system, the communication systems and construction of a VVIP pavilion and new satellite fire station.
Once complete, the airport will have an additional capacity, connectivity and resilience to handle another 3,5 million passengers annually with improved service, making the airport a strong contender for the much-coveted regional aviation hub status in southern Africa, for which Zimbabwe is geographically well-positioned to capitalise on.
Observers say it appears that geographically, Zimbabwe is more strategically suited to be the hub for Southern and Central Africa compared to its regional peers. And so investors can imagine the benefits from all major flights into the region routing through Zimbabwe first, and then connecting to Johannesburg, Nairobi, Addis Ababa, or Kampala!
But its State airline has operated in fits and starts since 2005, as the economy also took a tailspin, when the airline got saddled by huge debts and shortage of hard currency for spares and fuel.
Air Zimbabwe’s roots can be traced back to 1946 when it was known as Central Africa Airways and operated as a joint airline for Nyasaland, Southern Rhodesia and Northern Rhodesia.
This continued till 1967 when the joint operations ceased leading to the formation of Air Rhodesia.
It operated as Air Rhodesia until 1980 when the nation attained independence and adopted the name Air Zimbabwe. The airline operated as Air Zimbabwe Corporation until 1997 when Air Zimbabwe Pvt Ltd was created in terms of the Air Zimbabwe Corporation Repeal Act of 1998.
In 1980, Air Zimbabwe had 18 aircraft and was a major regional and international aviation player. The airline has been in a downward spiral since 2003 with passenger numbers significantly falling from one million in 1999 to less than 20 000 by 2016.