AirZim revival dead in the water

HARARE - Government's plans to revive flag carrier Air Zimbabwe (AirZim) are dead in the water for now after it failed to secure partnerships with reputable airlines that were put off by the massive debts at the struggling airline.

At present government has no money to bail out the haemorrhaging AirZim which this year made a loss of $24 million.

“There is nothing to expect from that front (reviving AirZim) unless we get money. For now, it’s a sinking company.

“For example, AirZim asks government to purchase fuel for it on a daily basis and it cannot run on its own,’’ Transport minister Joram Gumbo told the Daily News in an exclusive interview.

AirZim is currently saddled with a $300 million debt and was said to be making a $2 million loss every month.

Gumbo told the Daily News that government had pursued partnerships with reputable airlines but these fell through as a result of the financial problems at the national airline.

He said contrary to widespread reports that the new airline Zimbabwe Airways (Zim Airways) was a government project established to replace AirZim, the airline was privately-owned and had nothing to do with them.

Gumbo said Zim Airways is actually run by a private company known as Zimbabwe Aviation Leasing Company (ZALC) and government’s role was to facilitate the deal after initial efforts to revive AirZim fell through.

He told the Daily News he had personally courted Zimbabweans living in London and Dubai to invest in the Zimbabwean aviation industry.

“Cabinet approved the recapitalisation of AirZim. After the approval, we went around to negotiate with at least 12 airlines which included two African airlines, Ethiopian Airways and Kenyan Airways.

“We also targeted Air Malaysia, Lufthansa, Qatar Airlines, Turkish Airlines, Emirates Airways, Qantas Airways, Singapore Airways and China Air but we discovered that we were not going to succeed in our negotiations because AirZim’s financials are in shambles and they were not attractive to any one of the airlines to try and go into partnership with us,” Gumbo told the Daily News.

“However, I did not get discouraged. I tried to negotiate with Ethiopian Airlines so that we could get into some kind of an agreement where they could even have a higher shareholding structure than us. It did not work.

“Discussions with Air Malaysia however, became very interesting when we gathered that they had grounded some of their planes but after looking at our books and realised our indebtedness as an airline, they were put off but they then offered to sell us their grounded Boeing 777ER planes.

“Six of them had been grounded because of what had happened earlier when they had mishaps where one plane fell into the sea and another was shot down. So they were saying we do not want to have anything to do with them anymore,” Gumbo explained further.

“So our negotiations started with them seriously and since they said we cannot partner with you because of your issues.

“We were discussing with Price Waterhouse Coopers (PWC). We agreed that they could sell the planes to us.

“So I started negotiating to buy and so I informed government that I had clinched a deal with Air Malaysia to buy four Boeing 777 planes at $70 million for all of them and I thought this was a good deal for Zimbabwe. But again government failed to raise the money. I was buying these for AirZim.

“So after government introduced the policy to engage the Diaspora, to invest in the country, I reached out to them. There was a group in London and another in Dubai.

“I engaged them to say here is an opportunity if you are interested. My role as minister of Transport is to ensure that there is activity in the country, therefore I facilitated for one of these groups to negotiate with Air Malaysia through (PWC),” added Gumbo.

This group then formed the Zimbabwe Aviation Leasing Company.

Gumbo said ZALC has so far purchased two planes and is currently fundraising to acquire the remaining two under the terms of their agreement which stated the group would buy four planes in total.

“They are also trying to bring smaller planes to service local routes and they want to bring six smaller planes so that we can promote tourism in the country. My interest is that we keep Zimbabwe on the global aviation map,” said Gumbo.

Accusations have been flying since September that government was ditching AirZim for Zim Airways which was at first said to belong to deposed former president Robert Mugabe’s family and his son-in-law Simba Chikore.

Comments (1)

Why are the people who ruined Air Zim still walking free after committing such a gross offence?? We know it is Robert Mugabe and his cronies. Why is there such injustice??? When will Africa be truthful and sort our man made problems??

Chikowore - 29 December 2017

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