‘It’s not all gloom at AirZim’

Air Zimbabwe was placed under administration in terms of the Reconstruction of State Indebted Insolvent Companies Act [Chapter 24:27] from October 4 2018 to June 30 2021. Grant Thornton (chartered accountants firm) implemented the scheme of reconstruction, whereupon we appointed the outgoing interim board on July 8 2021.

IN the past few weeks, there have been significant developments at troubled national airline, Air Zimbabwe (AirZim). Transport and Infrastructural Development Minister Felix Mhona (FM) has appointed a substantive board to take charge as the airline embarks on yet another turnaround plan. There have been countless futile blueprints in the past 20 years. In this interview with the Zimbabwe Independent (ZI)’s business reporter Freeman Makopa, Mhona acknowledges that following an era highlighted by viability problems and market share losses, it is going to be a tough few years ahead. But he says he wants to be the man counted as the saviour of an airline that has been beset by decades-long waves of pillage and plunder. He shares his grand plan with Makopa below;

Fact file: Felix Mhona
  • Mhona is the Minister of Transport and Infrastructural Development.
  • He holds a Bachelor of Commerce in Marketing, Master of Business Administration in Strategic Management at Nottingham Trent University: UK. and a Bachelor of Law degree (LLB) with Unisa.
  • Mhona is a holder of several certifications including Institute of Bankers of Zimbabwe.
  • He is a farmer, banker, lawyer, entrepreneur and a politician with vast experience in project management and business administration.
  • Mhona is a member of Member of Parliament for Chikomba Central constituency since 2013.
  • Before his ministerial appointment, he has previously held influential posts in Parliament with his last assignment being the chairperson of the Parliamentary Portfolio Committee on Budget, Finance and Economic Development
  • He sat on Portfolio Committee on Environment and Tourism.

ZI: Tell us about your assessment of AirZim’s operations since it came out of administration.

FM: Air Zimbabwe was placed under administration in terms of the Reconstruction of State Indebted Insolvent Companies Act [Chapter 24:27] from October 4 2018 to June 30 2021. Grant Thornton (chartered accountants firm) implemented the scheme of reconstruction, whereupon we appointed the outgoing interim board on July 8 2021.

ZI: Give us more details about the reconstruction.

FM: The objective of the reconstruction process was to put AirZim on a sound operational footing so that it plays its critical role of facilitating the opening of connection to trade and tourism markets, and to enable our industries to link to global supply chains. To that extent the administrator came up with a six-year strategic turnaround plan which the airline is currently implementing. In order to continue the operationalisation of the plan, on August 1 2022 I appointed a substantive board with clear mandates to steer AirZim towards growth, sustainability and profitability.

ZI: The new board says the challenges ahead are still significant. Do you agree?

FM: Although the brand of AirZim has been somewhat affected due to the turbulence of the past years, I am happy at the pace at which the six-year strategic turnaround plan for the airline is being implemented. We are not resting until we have fully revived and primed the airline on a solid recovery trajectory. In that sense, we are fully committed towards ensuring that this national asset regains a lot of lost ground in terms of market share, integrity, brand image and world-class service delivery.

ZI: Has AirZim returned to profit?

FM: As stated above, AirZim’s brand has been beset with some challenges in the past. In addition, like other airlines in the world, AirZim was also greatly affected by the Covid -19 pandemic, which saw the whole world go into lockdowns. With the current easing of restrictions on Covid-19 regulations across the world, operations at the airline are gradually getting better. However, at the moment this has also coincided with the onset of the low season, where travel demand returned to lower levels across all routes. Bookings have significantly dropped coupled with the continuous rising of Jet A1 fuel price in the region and across the world. Nonetheless the picture is not all gloom as the airline has been able to sustain its operations due to availability of some charter flights which have smoothened some of its operational challenges.

ZI: What about the fleet?

FM: At the present moment the airline is using three aeroplanes where the ERJ145 is operating both domestic routes and the Johannesburg route.

The situation is not yet ideal as we are operating under tight conditions where in certain circumstances due to schedule demands we have ended up deploying the Boeing 737 (B737) or in extreme cases, the (much bigger) B767, which are costly on thin routes.

ZI: Please share with the market your route development plan.

FM: There is room for increasing our route network, especially with the anticipated acquisition of another aircraft. I am expecting the launching of at least two regional routes in the first six months of the tenure of the substantive board. As a matter of fact, plans are already afoot for this development

ZI: Minister, we all agree that this fleet is too old.

FM: Among the deliverables that I am expecting from the new substantive board is the finalisation of the procurement of aircraft that was initiated by the interim board. This is with a view to easing plane challenges that we sometimes encounter.

ZI: These are quite big plans. Will they be achieved with an acting CEO? Is he happy with acting CEO?

FM: At its inauguration, I instructed the new board to quickly go through the reviewed human capital structure that was done by the interim board to proceed to recruit, with the view to striking a balance between the skills, capacity gaps and the capacity to remunerate and motivate such recruited workforce.

ZI: Apart from AirZim, tell us about Zimbabwe Airways. What has happened to its planes bought from Malaysia?

FM: The status of Zimbabwe Airways is that it is a defunct entity which served its purpose as a vehicle for us to be able to acquire equipment for AirZim. To that extent its purpose was served and there is no more reason for it to continue to be in existence. The equipment is currently in long-term parking in order to manage maintenance costs, whilst we work on their effective deployment in line with the thrust outlined in the six-year strategic plan.

ZI: Pertaining to AirZim, is there anything that gives you sleepless nights?

FM: As Minister of Transport and Infrastructural Development, there is nothing that gives me sleepless nights about AirZim, serve to say that I am seized with the matter on how to adequately resource the national airline so that it takes its place among the best legacy carriers of the world. I am confident that with the substantive board now in place the strategic direction that was outlined for the national airline is now taking shape.

ZI: How much will the new board get in sitting fees?

FM: The board fees are all set in terms of directives from the Office of the President and Cabinet as governed in terms of Section 20(2) of the Public Entities Corporate Governance Act.

The sitting of the AirZim board is also set out in terms of the same Act. The annual general meeting is held once a year, then there are quarterly board meetings and subcommittee meetings as and when it is necessary to do so.

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