Air Zimbabwe seeks $1bn for recapitalisation, hunts for partners

Air Zimbabwe seeks $1bn for recapitalisation, hunts for partners

By Chipo Musoko, HARARE, May 18 (The Source) – Zimbabwe is seeking strategic partners for its struggling national airline Air Zimbabwe, which requires at least $1 billion to buy new aircraft and service its debt, transport minister Obert Mpofu told parliament on Monday.
Mpofu painted a dire picture of Air Zimbabwe finances, saying the company was generating revenue of $2,65 million per month against operational expenditure of $5,94 million a month. Air Zimbabwe has a monthly wage bill of $1,2 million and a total workforce of 760 – an average 152 workers for each of the airline’s 5 planes.
Mpofu said the firm was overstaffed but said it was struggling to lay off a planned 234 workers as it did not have funds to pay them off.
The airline, which once ceased operations between 2011 and 2012 due to viability problems, requires $770 million to procure new aircraft and $298 million to service both its domestic and foreign debts. The debt emanated from navigation, landing, handling fees, fuel supplies, salary arrears and rentals.
“Given the prevailing demands on the fiscus, it is not conceivable that the shareholder (government) can inject the required capital into Air Zimbabwe,” transport minister, Obert Mpofu told the Parliamentary Committee on Transport and Infrastructure Development committee on Monday.
Mpofu said the firm’s turnaround was dependent on finding a strategic technical partner.
“The ministry has prepared a list of strategic partners which shall be tabled before Cabinet for further guidance,” he said.
Since its revival over two years ago, the airline has failed to resuscitate its international routes but has managed to revive domestic routes and its lucrative Harare to Johannesburg route.
The airline has been operating a small antiquated fleet and this, according to Mpofu “has greatly compromised on quality and increased operating costs rendering the airline uncompetitive.”
Air Zimbabwe currently operates five aircraft – two Boeing 767, one Boeing 737, one MA60 and an Airbus A320 which was recently acquired on lease from China’s Sonangol.
The minister said the airline requires three small jets, two Boeing 737-500, and two Boeing 787 at total cost of $770 million in order to re-establish itself and become viable.