Air Zim seeks $368m

HARARE - National carrier Air Zimbabwe (AirZim) is seeking $368 million to sustain the viability of operations.

Eric Harid, the acting AirZim board chairman yesterday told Parliament that the company was planning to raise short and long-term capital as well as servicing  debt as part of efforts to implement a turn-around strategy.

“The capital requirements for 2014 are that we need to have aircraft either on lease or purchased.

“The figure that we are asking for is $331,97 million. When we were considering these figures, we were projecting January but now that we are already in September, it means we have to scale down,” said Harid.

He noted that the national airline also wants to refurbish its existing fleet of aircraft as well as re-joining the International Air Transport Association (Iata) clearing house at a cost of $2,1 million.

“We also need to have buildings for our offices as well accommodating staff and this will cost us $7,5 million. We are also looking at $10,3 million for plant, tools, equipment and systems and for human resources, we have a figure of $11,4 million,” added Harid.

He added that the reason for such a huge figure on human resources was that some of AirZim’s staff were sent home and were currently being paid 40 percent of their actual earnings.

“While we are paying them 40 percent (of their salaries), the 60 percent is accruing because they are still our employees, he said.

This comes as the airliner is currently saddled with a $302 million debt accumulated over the years at a time when it is putting up efforts to restore viability following years of decline.

Harid noted that the huge debt overhang was also compounded by lawsuits from staff members and creditors who were suing the national carrier for taking long to pay them.

He admitted that at AirZim,  there was a huge under-capitalisation, high fuels costs, shrinking of route networks and poor corporate governance issues that needed to be dealt with. Ironically, Harid is also the airline’s finance general manager thus exposing the lack of sincerity in instilling good corporate governance practices.

“I had the advantage of having come a little early as general manager in March and at that time, I was reporting to the chief executive (Edmund Makona). When we found ourselves in this situation (appointment of AirZim board in July 2014) we had already established rapport,” he said.

Harid admitted that he would still work under Makona as general manager but as far as boardroom issues were concerned, the former would report to him.

“Maybe honourable members have a better way of helping us out, we would be glad to hear you,” he said.

AirZim had last audited accounts in 2008 while those for 2009 were done but are yet to be ratified. The parastatal is aiming for optimum use of personnel for the next six months after which it will review progress in revitalisation.

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