AIR ZIM IN $1.7M RES­CUE DILEMMA Part­ner­ship deals in limbo

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga

NE­GO­TI­A­TIONS with three of the 12 po­ten­tial part­ners that the Gov­ern­ment had iden­ti­fied to re­vive Air Zim­babwe have not yielded the de­sired re­sults, a Cabi­net Min­is­ter has said.

The ail­ing na­tional air­line has a huge debt overhang amount­ing to about $300 mil­lion, which the Gov­ern­ment pledged to takeover once a strate­gic part­ner had been iden­ti­fied.

Trans­port and In­fras­truc­tural De­vel­op­ment Min­is­ter Dr Jo­ram Gumbo told Busi­ness Chron­i­cle on the side­lines of the just ended Par­lia­men­tary 2017 pre-na­tional bud­get sem­i­nar in Bu­l­awayo that the Gov­ern­ment was still search­ing for a po­ten­tial part­ner to get the best deal.

“We have made an an­nounce­ment that the Gov­ern­ment is look­ing for a strate­gic part­ner for Air Zim­babwe. The process is go­ing on and we have not found one. And when look­ing for a part­ner, you do not just pick some­body be­cause they are beau­ti­ful. But you have to con­sider what am I part­ner­ing, what is it that they will of­fer me and what is it that I am go­ing to of­fer,” he said.

Dr Gumbo said the Gov­ern­ment through his min­istry has ap­proached air­lines in Sin­ga­pore, Malaysia and Ethiopia. Asked why the process to se­cure a strate­gic part­ner was seem­ingly tak­ing too long, he said: “Be­cause we are not agree­ing on terms. We are ne­go­ti­at­ing with who­ever, you can­not just go and say I want a part­ner. Some­body will say for ex­am­ple, I want to look at your books, routes and the equip­ment that you have got and so forth.

“So, we are still ne­go­ti­at­ing and there is no timetable in con­clud­ing the dis­cus­sions. And if there was no hope for se­cur­ing a part­ner, I would not be dis­cussing and I must con­tinue un­til I am ex­hausted.”

He said a num­ber of air­lines on the con­ti­nent and in­ter­na­tion­ally were not per­form­ing well.

Among the 12 part­ners that the Gov­ern­ment has iden­ti­fied as po­ten­tial suit­ors for Air Zim­babwe are An­golan Air­lines, Boe­ing, Emi­rates and Air­bus.

Air­bus is a di­vi­sion of France-based multi­na­tional Air­bus Group SE that man­u­fac­tures civil air­craft while Boe­ing is an Amer­i­can cor­po­ra­tion that de­signs, man­u­fac­tures and sells aero­planes, ro­tor­craft and rockets across the globe. It also pro­vides leas­ing and prod­uct sup­port ser­vices.

Mean­while, Air Zim­babwe needs about $1.7 mil­lion to pay for the ser­vic­ing of its two A320 air­buses that were taken to South Africa for main­te­nance in 2014.

The two air­buses were taken to South Africa for C-Checks, a com­pre­hen­sive over­haul done on an air­craft after a cer­tain amount of time or us­age.

One of the two air­buses that was paid for is ply­ing the Harare - Dar es Salaam route, which the flag car­rier launched in June this year.

Dr Gumbo said at the mo­ment the Gov­ern­ment was fi­nan­cially ham­strung to pay for air­bus’ C-checks.

The strug­gling air­line’s cur­rent fleet in­cludes Boe­ing 737-200 (Ad­vanced), Boe­ing 767-200 ER and Air­bus A320-200.

“At the mo­ment, we are fail­ing to pay for the C-Checks that were done on that air­bus. We do not have the money to pay for it,” he said in an in­ter­view.

Speak­ing by tele­phone from Harare yes­ter­day, the chair­man of the Par­lia­men­tary Port­fo­lio Com­mit­tee on Trans­port and In­fras­truc­tural De­vel­op­ment, Mr Dex­ter Nduna, who is also Chegutu West leg­is­la­tor, said ser­vic­ing of the air­bus in South Africa had been com­pleted.

“Ser­vic­ing of Air Zim­babwe’s air­bus that is still in South Africa has been done. For as long as we do not pay for the ser­vic­ing, the air­bus will re­main grounded there (South Africa),” he said.

Air Zim­babwe is faced with op­er­a­tional chal­lenges from a num­ber of fac­tors that in­clude high op­er­a­tional costs, low load fac­tors and a huge debt overhang.

Ac­cord­ing to the Port­fo­lio Com­mit­tee’s re­port pre­sented in Par­lia­ment re­cently, Air Zim­babwe was los­ing $3 mil­lion a month and is tech­ni­cally in­sol­vent.

The re­port in­di­cates that the air­line was gen­er­at­ing an es­ti­mated rev­enue of $2,65 mil­lion a month against an op­er­a­tional ex­pen­di­ture of $5,94 mil­lion.

The Gov­ern­ment has also an­nounced plans to takeover Air Zim­babwe’s debt once a strate­gic part­ner is found. - @okazunga

Ms Unaiswi Nyikadzino Sch­weppes head of mar­ket­ing and pub­lic re­la­tions (left) and JMN Polytech­nic prin­ci­pal Dr Ngoni Moyo un­veil a plaque in­front of the com­mis­sioned bore­hole at Gwanda JMN (Zin­tec) cam­pus last Fri­day

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