SAA to benefit as Air Zimbabwe faces bankruptcy

Workers at Air Zimbabwe have successfully won a high court application to have the airline placed under judicial management, which will now see its affairs handled by a judicial manager, Innocent Mavhunga, and not the airline’s board.

South African Airways (SAA) and Emirates are set to cash in on the woes that have gripped Zimbabwe’s state-owned airline, Air Zimbabwe, which yesterday was placed under judicial management because of a $140m debt.

Workers at the embattled airline successfully won a high court application to have the airline placed under judicial management, which will now see its affairs handled by a judicial manager, Innocent Mavhunga, and not the Air Zimbabwe board.

At the heart of the court intervention is a salary dispute between Air Zimbabwe and its workers, who claim to be owed more than $35m in outstanding salaries since June 2009.

Caleb Mucheche, a lawyer for the workers’ union, said: "Since the court has appointed a judicial manager it means this is a prelude to liquidation. The judicial manager will now move in and the current Air Zimbabwe board will have to step aside.

"The judicial manager will assess if Air Zimbabwe is still a viable entity, but as the way things stand, all is not well, and he is likely to recommend liquidation. That is the process. Whenever a judicial manager comes in, the next step is liquidation," Mr Mucheche said.

Air Zimbabwe has had to suspend several international and regional flights to Johannesburg and  London as its debt crisis ballooned and saw its flagship Boeing aircraft seized by creditors for nonpayment of services.

The threat of liquidation is certain to work in favour of SAA, which holds the lion’s share in the airline market in Zimbabwe, according to the Civil Aviation Authority of Zimbabwe.

In 2010, SAA "accounted for the lion’s share of the airline market with 29,3%, relegating Air Zimbabwe to second position at 22,1%. British Airways-Comair came close on third position with 18,4%, while South African Airlink holds fourth position at 10,1%," reads a civil aviation authority report.

The United Arab Emirates-owned Emirates Airlines will start flights to Harare from February 1, in what is expected to start a return of international airlines to Zimbabwe after a 10-year hiatus.

More than 15 international airlines have pulled out of Zimbabwe, among them Lufthansa, Qantas, Austrian Airlines, Swissair, Air India, Air France and TAP Air Portugal.

A multi million dollar debt for Air Zimbabwe

State owned Air Zimbabwe is now under judicial management and faces liquidation after its debts shot to $140 million.

The application to place the national carrier under judicial control was made by the airline's employees on Friday, 20 January at the High Court in Harare.

Shepherd Chimutanda, a chartered accountant was immediately appointed judicial manager.

The order also barred the Air Zimbabwe board from involvement in the running of the company.

Workers sought the intervention of the courts after they went for more than a year without salaries. They are owed over $ 35 million in salaries dating back back to 2009.

It has since emerged that January 16, Air Zimbabwe's acting chief executive officer Innocent Mavhunga wrote to President Robert Mugabe warning him of the gathering crisis.  He pleaded for government assistance to  keep the airline afloat.

"We wish to advise that the non-payment of salaries and other statutory obligations for the period in question has not been deliberate, but rather a manifestation of underlying viability challenges that our company has been experiencing where we have even suspended international and regional flights with domestic flights having become erratic," reads part of the letter signed by Mavhunga and dated January 16.

Last week, Air Zimbabwe took delivery of a second hand A320-200 Airbus plane from France, in a deal brokered in secrecy.

Caleb Mucheche, the workers' lawyer said his clients had not been paid their salaries since 2009.

"Since the court has appointed a judicial manager it means that this is a prelude to liquidation.

"The judicial manager will now move in and the current AirZim board will have to step aside," Mucheche told the local media.

Creditors, in December seized the company's planes in South Africa and the United Kingdom over unpaid debts.

Regional Airlines Take Over Airzim Clientele

Victoria Falls — REGIONAL airlines have taken over beleaguered Air Zimbabwe's Victoria Falls clientele.

With Air Zimbabwe having indefinitely suspended servicing its domestic, regional and international routes citing "viability" challenges, its competitors have stepped in to fill the void.

According to sources at the Victoria Falls International Airport, South African Airways and British Airways (Comair) are now plying the Johannesburg-Victoria Falls route daily. Air Namibia lands at Victoria Falls Airport about three times a week.

Some visitors to the resort town are also using One Time Airways, Zambia Airways and other airlines from South Africa that land just across in Livingstone town.

As if that competition is not enough, there are about three airlines that have proposed to fly into Victoria Falls in a development that could see increased traffic and revenue for the tourism sector.

Recently, Civil Aviation Authority of Zimbabwe chief executive officer, Mr David Chawota told Chronicle that three new long haul airlines were courting the authority to fly direct into the resort town. He also said Fly Emirates had already indicated that it would start flying into the country next month landing at Harare International Airport.

Commenting on the matter, the Minister of Tourism and Hospitality Industry, Engineer Walter Mzembi, said it would have been wonderful to see the national airline being one of the airlines competing on the different routes.

"We need a paradigm shift here; we must see the opening up of domestic air routes and liberalisation of the airspace. Victoria Falls has become accessible to foreigners as foreign airlines continue landing here yet we say charity should begin at home," he said.

According to tour and adventure operators the landing of more airlines either in Livingstone or Victoria Falls should be commended as it was a clear sign that the tourism sector was now out of the doldrums after years of continued demonisation of the country by its detractors who included the Western media.

"For the tourism sector, it is a pity that our national pride has been compromised by Air Zimbabwe's failure to play a leading role. We are, however, happy that our clients coming in either through Livingstone or direct into Victoria Falls, are being serviced by other airlines.

"We commend the Government for considering other airlines that have expressed interest in landing in the country. We need to open the airspace and allow more players because at the end of the day it is the number of visitors that counts," said an operator on condition of anonymity.

Other operators who spoke on condition of anonymity said it was true that some travel agents were omitting Air Zimbabwe on their lists of airlines.

"It is no secret that travel agents are omitting Air Zimbabwe. This is because of its track record where travellers have grown accustomed to delays and cancellations. Right now some of the employees are on strike and as long as it is like that, no traveller in his or her right senses will choose Air Zimbabwe," said the operator.

A total of 18 international airlines have left the country in the last 10 years due to economic challenges facing the country and negative publicity.

These include Lufthansa, Qantas, Austrian Airlines, Swissair, Air India, Air France and TAP Air Portugal.

African airlines that no longer fly into Harare include Egyptair, Air Mauritius, Linhas Aereas de Mocambique, Air Namibia, Royal Swazi Airlines and Air Seychelles. Air Tanzania, Ghana Airways, Air Uganda and Air Cameroon have also pulled out.

Air Zimbabwe suspends flights to London, Johannesburg

ZIMBABWE’S National Airline, Air Zimbabwe, has suspended all flights to London with immediate effect.

This was announced by the Air Zimbabwe chairman Jonathan Kadzura on Sunday.

The company is a parastal, 100 percent owned by the Zimbabwe government.

This news follows an incident at London’s Gatwick Airport where one of Air Zimbabwe’s planes was recently impounded by an American aviation firm to which the carrier owed $1.5 million.

The company’s chairman added that Air Zimbabwe was also halting flights to Johannesburg, South Africa, citing financial reasons.

Kadzura said the national airline no longer has the capacity to service the Harare-London and Harare-Johannesburg routes.

Air Zimbabwe planes in Johannesburg were also targeted by creditors who last month impounded one of them on South African soil.

Kadzura said flights to South Africa remain suspended as the airline is still negotiating with ground handling firm Bid Air Services to settle an overdue debt of $500,000.

The airline will maintain flights to China, the Democratic Republic of Congo and Zambia.

American General Supplies recently impounded an Air Zimbabwe Boeing 767-200 and held it until the airline settled a $1.5 million account for spares and other equipment.

Kadzura said the Zimbabwe inclusive Government does not want to rescue the national airline.

Impounded Air Zim plane scheduled to arrive

Zimbabwe: The Air Zimbabwe plane which was impounded in London over a $1,5 million debt owed to United States-based American General Supplies (AGS), is now scheduled to arrive in the country on Sunday.

The plane had been scheduled to arrive today after the government settled the debt.

The plane which was supposed to leave yesterday is said to have developed a technical fault that needed attention.
Acting Air Zimbabwe chief executive officer Innocent Mavhunga confirmed the latest development saying: “We are still working on the aircraft and other logistics too so that the plane will leave as soon as possible. We are in the process of arranging that. The plane will leave after clearance.”
Sources at the airline said they had been advised aircraft had not yet been fixed because the spares had been bought outside the United Kingdom and are yet to arrive.
“We have been advised that the spares will now arrive in the UK from the US yesterday afternoon due to delays in movement of money transfers hence the Thursday hangar slot is lost,” said the source.
“The plane will now be repaired on Friday evening on the only first available slot. UK Civil Aviation Authority will inspect it on Saturday and hopefully it will be certified to depart arriving here on Sunday.”
AGS impounded Airzim’s Boeing 767-200ER at Gatwick International Airport last Monday over the overdue debt. The Transport ministry sourced the money for the beleaguered airline which has struggled to pay its workers for the better part of this year.
After the plane was impounded, many passengers had to be rerouted and others reimbursed while many more were booked into hotels where some of them were later thrown out after the airline failed to pay for their accommodation, but Mavhunga dismissed the allegations.

Air Zim plane finally released

AIR Zimbabwe’s Boeing 767 plane, impounded at Gatwick Airport over a week ago, was finally released on Tuesday, but the airline says it will take a few more days before flights can resume.

The aircraft was seized by US spares and maintenance firm, American General Supplies as it tried to force payment of a US$1.5 million debt.

Air Zimbabwe's regional manager for Europe and the America’s, David Mwenga cornfirmed the release of the aircraft and apologised to passengers inconvenienced by the crisis.

“We have to apologize to a lot of our passengers,” Mwenga told SWRadio Africa.

“We cancelled three flights because of this situation. We are sorry this happened.”

More than a hundred passengers due to have flown to Harare on the day the plane was seized were left stranded and also suffered the ignominy of being thrown out of a London Hotel after the airline allegedly failed to pay.

Meanwhile, Mwenga said flights would only resume after repairs to problems that developed over the time the plane was grounded have been completed.

Engineers are expected to complete the work by the end of the weekend.

However, the crisis ruined affected passenger’s holiday plans as most would have hoped to be home with their families in time for Christmas.

Mwenga said some had been refunded and managed to make alternative arrangements, but admitted that most could not be given back their money because of limited funds.

Air Zimbabwe has also been forced to suspend flights to South Africa fearing more of its aircraft could be seized by creditors.

The airline is said to be saddled with a debt of about US$140 million.

Air Zimbabwe to resume flights

AN Air Zimbabwe plane that has been holed in London after a US company threatened to auction it over a US$1,2 million debt is now expected in the country on Tuesday.

On Monday, General American Supplies impounded Air Zimbabwe’s Boeing 767-200 at Gatwick International Airport and threatened to auction it to recover money owed by the troubled airline.

Government intervened to save the plane from going under the hammer. Innocent Mavhunga, the airline’s acting group CEO told The Standard the plane would now leave London tomorrow evening and arrive on Tuesday.

He said the airline had paid the US$1,2 million debt plus the legal fees. Mavhunga said that flights to South Africa would resume any day this week. “We hope to have resolved the matter between Monday and Tuesday,” he said adding that the parent ministry continues sourcing funding for the airline.

Last week, Air Zimbabwe suspended flights to South Africa fearing that creditors would pounce on the airline once it landed at OR Tambo International Airport.

The troubled airline has debts of over US$100 million which it has failed to service owing to low revenue streams and antiquated equipment which has increased the cost of running the business.

Analysts say government has to move out of the airline to stop the financial haemorrhage but are unanimous that doing so now would mean the airline would be sold for a song.

Chinese airline, Hainan, has been linked to Air Zimbabwe but despite the suggestions and meetings with officials by President Robert Mugabe last month, nothing has moved along that front, with the airline further sinking in the abyss.

In the meantime, regional airlines like South African Airways, Kenya Airways and Ethiopian Airlines are feasting on the problems of Air Zimbabwe, getting the traffic to and from Zimbabwe on a silver platter.

Air Zimbabwe passengers stranded as airline runs out of money

More than 70 passengers have been stranded at Gatwick International Airport for nearly a week because Air Zimbabwe’s only long haul aircraft was grouned because the airline couldn't pay nearly £1m in bills.

Air Zimbabwe’s 767-200, named Victoria Falls, was seized by American General Supplies when it landed from Harare at Gatwick International Airport early on Monday.

That evening about 100 mostly Zimbabwean passengers checked in and then learned their flight was delayed. Some were given camp beds on which to sleep at Gatwick and next morning they learned the aircraft was seized via a US court injunction by American General Supplies for unpaid debt for spares of £966 000.

“We demanded proof that the debt had been paid and saw documentation suggesting a transfer of US$1 million (£644 000) was made which is less than the American company is claiming,” one passenger said on Thursday. “Departure is now supposed to be Monday night which is disgraceful,” said a Harare resident whose wife is stuck at Gatwick.

Air Zimbabwe’s London manager, David Mwenga had to flee Gatwick earlier this week as fuming Zimbabweans chased him when he was unable to provide a firm departure date.

Acting Air Zimbabwe chief executive, Innocent Mavhunga, meanwhile announced the airline had now suspended daily flights to Johannesburg.

"We are not flying into South Africa. We are trying to secure funding to pay our debts there,” he said.
Last week, a South African airport support services company, Bid Air, forced Air Zimbabwe to ground a plane in Johannesburg as it pressed for payment of a £320,000 debt.
Zimbabwe's economy has virtually collapsed in the years following the forced seizure of white-owned farms by President Robert Mugabe. The policy led to sharp falls in prodcution, rampant inflation and food and fuel shortages.

Air Zimbabwe suspends South Africa flights

Zimbabwe's state-owned airline has suspended flights to South Africa over fears its planes could be seized to pay its outstanding debts.

The airline is reported to owe $500,000 (£320,000) to a local supplier.

Earlier this week an Air Zimbabwe plane was grounded in London until a similar debt was paid off.

The airline is reported to be struggling to deal with a total debt of $140m and is said to be on the verge of collapse.

"We are not flying into South Africa. We are trying to secure funding to pay our debts in South Africa," Innocent Mavhunga, Air Zimbabwe's acting chief executive, told the state-owned Herald newspaper.

He said, however, that the airline was continuing to fly to Zambia and the Democratic Republic of the Congo.

Other companies, such as South African Airways and British Airways' Comair, continue to fly between Zimbabwe's capital, Harare, and South Africa, the regional powerhouse.

Air Zimbabwe Plane Impounded In London

Zimbabwe’s ailing state run airline, Air Zimbabwe’s woes worsened on Monday after one of its planes was impounded in London by a United States company.

Informed sources told Radio VOP that Air Zimbabwe’s long haul aircraft, a Boeing 767-200 known as Victoria Falls, was seized by American General Supplies upon landing at London’s Gatwick International Airport on Monday morning from Harare International Airport.

American General Suppliers secured a court injunction in the US that gave them the power to impound the aircraft over US$ 1, 2 million debts, according to a source on Monday.
“The AGS has impounded our Boeing 767 flight to London over unpaid debts. The plane was supposed to leave Harare on Sunday morning but it only left around 5PM because of the problems. Unfortunately it was then impounded and this is going to affect the workers who have not been paid over the past six months,” a senior staff member who requested anonymity told Radio VOP.
Air Zimbabwe acting chief executive officer, Innocent Mavhunga, could not give a comment over the issue saying he was attending to meetings.
“I can’t give you a comment at the moment because I am in meetings. You can try to get in touch with me after three hours,” said Mavhunga before switching off his mobile phone.
However, Air Zimbabwe board chairman Jonathan Kadzura confirmed that indeed the plane had been impounded due to non-payment of debts but blamed the situation on the Ministry of Finance and inclusive government.
“From our part we are very clear that this issue is political and we are hoping that the Finance Minister Tendai Biti will be able to see what we mean when we say he should support the parastatal. Surely the government has the capacity to pay the outstanding US$1,2 million debt,” said Kadzura.
“They (American General Supplies want their debt settled in full plus costs. We can see more attachments (of aircraft) coming,” said other sources, who asked not to be named as they are not authorised to speak on behalf of the airline.
The impounding of the aircraft follows the seizure of one of Air Zimbabwe’s plane, a Boeing 737-500 which was confiscated by South Africa’s Bid Air Services two weeks ago over a $500 000 debt for ground handling services.
Another international company, ASECNA has already secured a court ruling in France over which it could impound Air Zimbabwe's airplanes due to an overdue debt, while British Airport Transport and American General Supplies, a major supplier of aircraft spares to Air Zimbabwe, had warned that they could suspend services due to accumulating arrears.
Once rated as one of the best airlines in Africa, Air Zimbabwe has been run down due to successive years of mismanagement and inadequate funding.

Mugabe follows up on AirZim, Chinese aviation deal

Zimbabwe’s troubled national airline, Air Zimbabwe, could soon partner with a Chinese passenger carrier, the Zimbabwe Guardian has learnt.

President Mugabe is at the forefront of brokering a deal with Chinese airline, Hainani.

The president yesterday met a delegation from that airline to discuss possible ways of venturing into a partnership with troubled Air Zimbabwe.

Zimbabwe’s ambassador to China, Frederick Shava expressed confidence of striking a deal with Hainani Airline, saying the airline has shown interest in operating in Zimbabwe.

The President also met the owners of Anjin Diamond – Chinese company licensed to mine diamonds in the country.

The meeting with the Chinese business people was also attended by the Minister of Agriculture, Mechanisation and Irrigation Development, Dr Joseph Made, the Minister of Foreign Affairs, Simbarashe Mumbengegwi and government officials.

The president and all the officials are on a state visit to the eastern country.

President Mugabe and his delegation will conclude the state visit this Thursday.

Chinese state media reported that the Zimbabwe and China promised closer ties on infrastructure projects, agriculture, mining and trade.

But no details were given of any new deals that might have been signed.

Reuters news agency quoted Chinese official statistics as saying trade between the two countries was worth $717m in the first nine months of this year – a 62% rise compared with with the same period last year.

In March, China signed nearly $700 million in loan deals with Zimbabwe, and urged the government to protect Chinese firms from nationalisation plans.

China’s investments have been growing steadily in Zimbabwe and include diamond and chrome mining, platinum concessions, road construction, cotton and tobacco companies as well as a cement manufacturing plant.

Chinese vice-president Xi Jinping praised President Mugabe as an “old friend” of China and “a famed leader of the national liberation movement in Africa”.

“China is willing to join hands with Zimbabwe, enhance friendly exchanges, and expand practical cooperation,” Xi said after meeting with President Mugabe.

Chinese media reported that the two men agreed to deepen cooperation on projects related to infrastructure, agriculture, mining and trade.

Xi, who is likely to succeed Hu Jintao as China’s president in 2012, apparently is committed to increasing Beijing’s cooperation with African countries.

Air Zimbabwe Refere Three Options to Local Passengers

EMBATTLED national airline, Air Zimbabwe, which is struggling to service its routes is now booking passengers on buses to some of their local trips, it emerged this week.

Scores of passengers who were scheduled to fly to Bulawayo on Sunday were left stranded after their flight was cancelled at the last minute due to operational challenges.

In a telephone interview on Monday, a spokesperson for Air Zimbabwe, who refused to disclose her name confirmed the cancellation of the flights and said they gave passengers three options.  The first option was to be booked in a bus that was supposed to leave Harare on Monday afternoon, the second one being to be rebooked for a Wednesday flight, while the last one was to have the passengers' money refunded.

"Our flight to Bulawayo on Sunday had to be cancelled due to operational challenges and we had to give the passengers three options.

“Those who were in a hurry were asked to use a bus on Monday afternoon, while others had their flights rebooked for Wednesday. Those who felt hard done by the move will have their money refunded," said the spokesperson.

One of the affected passengers, Mutare businessman Mr Isau Mupfumi, who was scheduled to fly to Bulawayo to attend to pressing commitments at his Senatar Tours, said  he was surprised to be told that the flight had been cancelled when he was  already at the airport.

"This is so inconveniencing because we had already made plans for meetings in Bulawayo, only to be told that the flight had been cancelled. When flights are cancelled the service provider usually pays for the passengers' accommodation while they wait for the next flight and this did not happen after Sunday's flight cancellation.

"Some of us we are in the public transport business and it was an insult for Air Zimbabwe to ask us to use buses to travel to Bulawayo. I could have even looked for the most comfortable bus among my fleet to take me to Bulawayo, but we opted to support our national airline, only to be repaid through this kind of service," complained Mr Mupfumi. Some of the passengers going to local routes like Bulawayo and Victoria Falls are first travelling to Johannesburg in South Africa and reconnect back to Bulawayo and Victoria Falls due to Air Zimbabwe's inconsistence.

Most passengers who opt for refunds have to wait for a little longer to have their money as the national airline takes time to avail the refunds.

"We do not pay refunds there and there and that is why we usually try to rebook our passengers in the next available flight," said the Air Zimbabwe spokesperson.