Will Air Zim ever be a viable airline?

HARARE - Recently and over a period of time, questions have come up about whether Air Zimbabwe is ever going to make it as a viable airline or not.

Not so long ago, the airline appeared before a Transport Parliamentary Portfolio Committee and one major thing that was raised was the need to reintroduce the London route. This was highlighted so much an impression was created suggesting that the return to normalcy and viability hinged on this single event.

It was claimed that this was the cash cow and if reintroduced, the airline might be back in business in a sustainable way.

The Daily News had an extensive interview on Air Zimbabwe with Davison Todson Gomo, a business consultant and analyst who is also chief executive officer of African Leadership Convention (Harare).

Q: Should government own Air Zimbabwe?

A: There are those who believe that government cannot and should not run any business because the best they do is to ruin it through lack of appropriate business experience and unwarranted interference in professional decision making.

There is also a school of thought that suggests the airline must be privatised in order to guarantee its survival something it cannot achieve under direct government ownership.

The big question that needs to be answered is why are some airlines that are owned by government wholly or partially doing well albeit with government financial support when such is needed? Is it about ownership or is it down to management capabilities?

It is important to provide answers to these questions before taking a firm position as to which direction we should take to restore the viability of Air Zimbabwe.

Q: But is it not possible for a government to successfully run an airline?

A: Much as there are numerous voices that want government out of the parastatals because they believe it is totally unable to run business and in this case Air Zimbabwe as a case in point, there is a lot of evidence that points to many government-owned and run institutions that have done exceedingly well in different parts of the world. It is therefore, very possible and rightly so for the State to create, own and manage an airline as a business.

Q: So what is the problem with the government successfully running Air Zimbabwe?

A: The biggest problem is that often these parastatals are condemned to being run by boards that by and large are clueless resulting in bad decisions being made and perhaps in some cases decisions not being made at all.

The airline (Air Zimbabwe) is clearly a victim of poor management and there is overwhelming evidence to support that. What is worrisome is that no lessons have been learnt from previous failures and we carry on running the airline as if all is normal.

Air Zimbabwe is not performing well not entirely on account of being government-owned but there are a host of other attendant factors that need looking into, government involvement notwithstanding.

Q: What then is wrong with Air Zimbabwe’s operations?

A: The instability that Air Zimbabwe has experienced over the years is due to boards being dissolved each time a new minister is appointed and to questionable management decisions.

This has resulted in boards being ineffective and generally unable to see the strategies of the organisation through. Perhaps, it will help a lot if reasons for board dissolutions are made public to enable the public to appreciate the basis for that action.

The assumption is that a new board understands the underlying business problems but that may be far from true. On the contrary, such a move may leave management unsure about the commitment to the organisation’s plans and the way forward.

Q: Is there any political interference in running Air Zimbabwe?

A: Whether it is true or it is only a perception, political interference into parastatals business is too deep and ingrained and consequently the atmosphere emasculates both the board and top management because instead of doing their job professionally, they spend too much time trying not to offend the minister at the peril of their own jobs and the efficiency of the organisation.

In this case, one of the biggest problems is that Parliament does not appear to have effective control  in terms of making sure that Air Zimbabwe is  run properly in terms of the law.

Lack of effective parliamentary oversight leaves the parastatal free to drift into any direction and often spending money on peripheral issues instead of spending on items that are strategic to the survival of the airline.

Q: Away from government control, which other factors if not addressed will affect the airline’s operations and viability?

A: Air Zimbabwe used to fly to a number of domestic destinations on a daily basis but that is no longer the case. The abandonment of these local destinations obviously eats into the revenue potential of the airline apart from relegating these destinations into non-viable business options.

Surprisingly, Kariba that was once a popular local destination has been totally neglected and those responsible for tourism and regional development have paid a blind eye to the deterioration of Kariba Town resulting in a negative impact on Air Zimbabwe tourist flows into Kariba.

Hwange, Buffalo Range and Gweru are no longer viable. Mutare, the capital city of a huge tourist zone has no airport to speak of and tourists are expected to drive all the way from Harare to Nyanga and Vumba.

There is no doubt that a Recovery Strategy that fails to harness the potential of local destinations adds to the woes of Air Zimbabwe.

Q: What about the regional markets?

A: Air Zimbabwe failed to maintain its presence in a number of regional destinations and naturally, they lost that share of the market to Kenya Airways and South African Airways primarily but the introduction of low cost airlines in the region will make it extremely difficult for Air Zimbabwe to fight for a re-entry due to stiff competition.

The recent return to Tanzania is a breath of fresh air but is not sufficient to give Air Zimbabwe the presence and revenues it requires to return to being a powerful and respected player that it was yesteryear.

Q: What about the international markets?

A: Apart from the London route that is supported by the presence of a huge Diaspora population resident in the UK, Air Zimbabwe needs to do a lot more to regain its status as an airline of preferred choice.

To achieve that position, Air Zimbabwe requires attending to the problem of residual negative perceptions associated with the country brand, poor service, lack of reliability and a history of delayed and cancelled flights.

In order to do well, Air Zimbabwe needs not only a growing domestic economy but a stable global economy that generally gets people moving around for pleasure/ leisure or in search of business and job opportunities.

However, the tragedy is that the domestic economy is failing and cannot therefore give Air Zimbabwe the respite it requires in the domestic space to do well. Meanwhile, intra-regional travel is curtailed by lack of a middle class that often has a tendency to move around.

Q: Is the London route sufficient when we look at international markets?

A: At international level, London alone is not sufficient to give Air Zimbabwe the level of revenues it requires to finance its huge capital requirements and its running costs.

Regrettably, the other international routes may not be appropriate to try at this stage firstly because the airline may not have the financial capacity to sustain operations in these routes at the moment. Secondly, the entry of new players has effectively reduced the market.

Q: What other immediate challenges should Air Zimbabwe address?

A: Over and above these market challenges, Air Zimbabwe still needs to resolve its debts, deal with new competitive pressures, address the question of high operating costs, think about the replacement of the aging fleet, find a way to improve operating systems to boost efficiencies and of course stamp out corruption altogether.

Unless the board and management combine their effort to deal with these challenges honestly, there is only but a remote chance that Air Zimbabwe will return to being an Airline of choice.

Q: Can something be done to create a positive business climate and get Air Zimbabwe back in business?

A: It is possible but management needs to work twice harder to create conditions for business success.

Given that the level of differentiation at physical product level may be difficult because of the dominance of Airbus and Boeing, the airline needs to make a strong case for service quality, competitive pricing and working on restoring its reputation and image.

In the absence of accurate expenditure figures to go by but nevertheless relying on press reports, it does appear like Air Zimbabwe needs to rationalise its expenditure in order to improve operational efficiency and enhance its opportunity for competitiveness. Nothing short of that will save it from being driven to the margins of the airline industry.

Q: But is Air Zimbabwe not working to revive its fortunes?

A: Presumably it is working on a strategy to overcome its present problems. Thus, understandable but it will need to come out of the crisis mode first. Being stuck in crisis mode invites a lot of legitimacy questions about the capabilities of the leadership and the assumption is that the current leadership understands the futility of that position.

Q: How is the public confidence in terms of Air Zimbabwe?

A: Ordinarily, Air Zimbabwe appears like an organisation that has been cut off from its public. No one seems to know what is going on and in the absence of annual reports that tell the public the real story, Air Zimbabwe becomes a contested territory because the public hardly sees direct benefits to them.

The airline has been reported very negatively for a long time. Its board members have been dissolved for alleged incompetency and managers have been suspended for corruption and of course in the recent past, the airline was in the news as a result of the trial of some former senior managers.

Whether the allegations were true or not, it is immaterial, all that people can remember and will remember all the time are negative stories of gross incompetency and alleged corrupt activities at the airline.

Q: What do you think is the airline’s strategy?

A: To date, the airline has failed to avail a clear strategy articulating how they propose dealing with  the litany of these shortcomings.

Unless they tell the public how they plan to redeem themselves, the airline will remain in the doldrums for some time to come.

At this point, it is unfortunate that even Zimbabweans prefer to use foreign airlines than stay loyal to theirs.

The public has deserted Air Zimbabwe because there is a general perception that the airline is no longer efficient and as such, service quality has been severely diminished to the detriment of the airline standing in the marketplace.

Q: What is the way forward for Air Zimbabwe?

A: Of course, all the issues raised here notwithstanding, it is normal for all businesses to go through booms and troughs and Air Zimbabwe has seen its bad days but it is time that it begins to find its way to the right business terrain.

For this to happen, it requires that the air transport industry as a whole be back to profitability, passenger traffic must improve drastically and all capacity constraints must be removed and airline seats must be available to the public at affordable prices.

In simple terms, air travel should not be a luxury anymore. Unless the board and senior managers commit to drive Air Zimbabwe back to sustainable operations, the public will always reserve themselves the right to call for its privatisation or disbandment.

Comments (1)

your analysis is correct but people now have a negative perception of Air Zimbabwe. That at anytime passengers can be delayed because Mugabe needs the plane for his never ending travels which brings nothing to the country. During the mid 80s when Ushewokunze was Minister of Transport, it used to viable and choice for many with Muyambizi as the General Manger.

Dunga - 11 July 2016

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