AirZim primed for rebound
AIR Zimbabwe administrators handed over control of the business back to management on Thursday, with a robust six-year strategic plan most likely to see the State-owned airline reclaim its status as a preferred local and regional carrier.
While the coronavirus remains a big challenge to most airlines, ongoing vaccination programmes are a huge boost to air travel, which had been brought to its knees by restrictions.
The Government appointed Grant Thornton’s Mr Reggie Saruchera and Mr Tonderai Mukubvu as co-administrators to run its loss-making national airline in October 2018 in a bid to revive its fortunes.
They managed to avert a possible collapse of the flag carrier and the Government commended the“legacy of hard work and honesty left by the administrators”.
Key milestones include recovery of assets bought by the Government between 2016 and 2017 — an Embraer aircraft and two Boeing 777-200ER aircraft.
The administrators operationalised Boeing 737-200 (regional and charters), Embraer 145 (domestic and regional) and Boeing 767200ER (commercial charters). Financial records were also updated. Further, internal controls were enhanced to ensure sustainable operations during reconstruction, including recovery of some debts.
The administrators entered a compromise arrangement with stakeholders, which resulted in settling fully all validated and proven local creditors.
A scheme of reconstruction to pay foreign creditors over three years was developed, including rationalisation of staff from 647 to 168 — 82 permanent and 86 contract employees.
The balance sheet was restructured from a negative equity of US$305 million to a positive equity of US$80 million.
Equally critical, the administrators developed a six-year strategic turnaround business plan that will be implemented in two phases.
Last week, the Government appointed a new board led by Mr Andrew Bvumbe to oversee the implementation of the strategic plan.
During the first four years, the administrators proposed the development of Harare as a regional hub to support regional and international travel, an advantage currently enjoyed by Johannesburg in South Africa.
They proposed usage of cost-effective
smaller aircrafts targeting most profitable routes both domestic and regional.
For instance, it is proposed that Air Zimbabwe fly at least five times a day to Johannesburg using low-cost aircraft.
Once Harare is developed as a regional hub, Air Zim may resume international flights using its long-haul aircraft.
At the moment, it is uneconomic to fly big aircraft locally or regionally since they are not designed for short trips like Harare-Johannesburg or Harare-Bulawayo route.
The minimum flying hours have to be around eight for the bigger aircraft to be cost-effective.
It has been proposed that Victoria Falls be developed as a tourism hub to support local tourism.
On the supporting infrastructure, it is proposed that domestic runways at Buffalo Range, Gweru, Masvingo, Kariba and Mutare be expanded to have a length of 2km and 30 metres to accommodate expansion of domestic tourism destinations.
Speaking at the occasion to unveil the new board, Transport and Infrastructural Development Minister Mr Felix Mhona urged the board to oversee the finalisation and implementation of the Air Zimbabwe’s business plan as approved by Cabinet.
“I want to take this opportunity to express the confidence that the Government has in the interim board as it embarks on a journey to carry on of hard work and honesty left by the administrators,” he said.
The interim board is expected to finalise the production of audited accounts for the airline, instil a high standard of corporate governance and ensure adherence to the schedules by the airline despite limited resources.
The other interim board members are head of Public Sector Investment Programme in the Ministry of Finance and Economic Development Mr Pfungwa Kunaka and Zimbabwe Tourism Authority acting chief executive officer Mr Givemore Chidzidzi.
Chief director (public procurement and disposal of public assets) in the Corporate Governance Unit in the Office of the President and Cabinet Dr Michael Musanzwika and deputy director-strategic policy planning in the Ministry of Transport and Infrastructural Development Mr Nyikadzino Chifema are the other members.
Improved air connectivity is critical to Zimbabwe at a time the country is on a drive to attract foreign direct investment as well as enhance tourist arrivals.