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AirZim crisis reaches breaking point

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Air Zimbabwe’s financial crisis is now seen at breaking point after investigations by Parliament unearthed that the national airline is currently operating on an overdraft, unable to service its planes or retire delinquent debts estimated at $64 million.

The national carrier, one of the 10 parastatals that government plans to sell, has already pulled out of 18 routes from 25 and scaled down on the number of flights per week to rationalise operations and contain costs. The airline’s fleet has also declined and aged, becoming too costly to maintain.

The issues emerged after the Parliamentary Portfolio Committee on Transport and Infrastructural Development visited Air Zimbabwe workshops earlier this year.

The portfolio committee also noted that Air Zimbabwe labour problems with its retrenched workers were a result of delays in implementing the 2004 Strategic Plan.

Presenting the report on the organ’s findings and recommendations in the august House last week, the portfolio committee’s chairman Blessing Chebundo said Air Zimbabwe urgently needed a strategic partner to overcome funding, debt and operational problems.

“It was stressed to the committee that the airline was basically operating on an overdraft facility. The committee was informed that creditors are always threatening to cut their services if the airline does not pay,” Chebundo said.

“The committee observed that the airline has a huge debt, which upsets the airline’s balance sheet and makes it impossible for it to borrow resulting in the airline having to operate on a cash basis.

“The airline is in need of urgent capital injection because it incurred huge losses during the period it was denied permission to charge in foreign currency and was operating at a loss of $2 million per month.”

The committee also noted that Zimbabwe’s suspension from the IATA Clearing House had discouraged passengers from using the airline, hurting viability and aggravating its woes.

Despite pulling out of traditional routes, Air Zimbabwe still feels these routes are viable because other airlines plying them are always fully booked.

It also emerged from the MPs’ tour that Air Zimbabwe lacked advanced equipment to service other airlines’ aircraft landing in Zimbabwe, forcing them to bring their own technicians.

The airline, the committee revealed, has also been hit by an exodus of critical artisans such as pilots, engineers and flight dispatchers due to its inability to match competitive remuneration packages offered by competitors within and outside the region.

The report also revealed that the problems that Air Zimbabwe experienced with its retrenched workers were due to delays in implementing the 2004 Strategic Plan. “Whereas the retrenchment exercise was noted in 2004, it was necessary in 2008 for management to review the exercise and consult workers before implementing the exercise,” Chebundo said.

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