Air Zimbabwe now US$138 million in debt

Air Zimbabwe is losing US$3.5 million a month and currently has US$138 million of debt, according to the airline’s head, versus US$6 million of debt in 2006.

“Our cost of operating the business sits at about US$6 to US$7.5 million,” Air Zimbabwe Chief Executive Officer Innocent Mavhunga said on Tuesday, Radio VOP reports. “Our income is between US$2.5 and US$3.5 million. So simple mathematics would tell us there is a deficit averaging US$3.5 to US$5 million every month." He said that the state owned airline has US$137.7 million of debt, US$112.7 of which is owed to local creditors.

Mavhunga made the comments at Parliament’s Portfolio Committee on State Enterprises and Parastatals, which asked airline management to discuss the current state of affairs and explain how the airline will overcome its problems.

“On internal debt, statutory obligations to companies like the Zimbabwe Revenue Authority and the National Social Security Authority account for US$38 million, loans from the ministry of transport are up to US$26 million, deferred staff salaries and allowances are US$20 million plus US$12.3 million from our overdraft facility with our banks,” Mavhunga added.

“Our external debt comprises US$4.6 million to the International Air Transport Association and another US$4 million to Global Systems. We also owe our aircraft spares and parts suppliers some money and I think we have about US$5 to US$8 million for navigation services.”

Mavhunga said Air Zimbabwe’s dismal financial situation was due to sanctions and, during the era of the Zimbabwe dollar, the government’s refusal to charge in foreign currency. Other reasons for the airline’s poor performance were repeated pilot strikes, high operational costs from ageing aircraft, reduced passenger confidence in the airline and government interference.

“AirZim has been operating under a deficit since the 1990s and this worsened at the inception of the multiple currency regime,” Mavhunga siaid. “We have become less competitive, hence we have to price our fares slightly below our competitors.”

Several Air Zimbabwe aircraft were earlier this year grounded due to safety concerns and a leased aircraft was taken back after Air Zimbabwe could not pay for it. Of the airline’s fleet of eight aircraft, three are grounded. Such incidents have resulted in a big drop in passenger numbers and some Air Zimbabwe flights this year have flown almost completely empty.

Declining passenger numbers have forced the airline to reduce the number of destinations it services. It currently flies to Harare, Johannesburg, Lusaka, Bulawayo, Victoria Falls and Lubumbashi locally and Malaysia, China and the UK internationally.

Foreign carriers have been taking over the domestic market. “Our market share versus South African Airways is quite low. We control 30% of the Johannesburg route and market, whilst SAA accounts for about 50% of the market and British Airways slightly below 20%,” Mavhunga said.

Mavhunga said that Air Zimbabwe needs to be privatised and needs to retrench 400 employees from its bloated workforce of more than a thousand employees in order to cut costs. The airline consistently struggles to pay its workforce – something that has led to repeated pilot strikes. The airline last paid its workers in June.

“We immediately require US$40 million as working capital because we are operating on a cash-upfront basis with all our service providers and we need to service our creditors. We immediately need to restructure the airline, look at change management, recapitalise and inject a new fleet,” Mavhunga said, adding that it will take up to a year to overcome damage from the recent strikes.

The airline’s general manager Moses Mapanda told the parliamentary committee that attempts to assist Air Zimbabwe by encouraging government officials and MPs to travel on the state airline were not working. “If government officials do not support their own business, how does the shareholder expect Air Zimbabwe to survive?” he asked.

Zimbabwe's National Airline Defaults

Zimbabwe’s national airline has been suspended from the International Air Transport Association for failing to pay its dues. Air Zimbabwe, one of Africa’s oldest airlines, has other major financial and operational difficulties.

Top executives at Air Zimbabwe say they are trying to find about $280,000 from the government to pay the International Air Transport Association so it can resume foreign bookings.

The International Air Transport Association has ordered international travel agents to refund foreign travelers with bookings placed with Air Zimbabwe.

The airline, founded 47 years ago, has suffered several strikes this year when pilots refused to work until they were paid what they said were outstanding allowances.

Several privately owned Zimbabwean newspapers have recently reported Air Zimbabwe is massively overstaffed for its small fleet of aircraft.

The airline says its most profitable flight is its twice-weekly Harare to London run, as the airline is the only one in Zimbabwe flying directly to Britain. Most other major airlines pulled out of Zimbabwe under the former ZANU-PF government.

Air Zimbabwe chairman Jonathan Kadzura said recently the pilots’ strike had hammered Air Zimbabwe’s liquidity.

Earlier this year, when President Robert Mugabe regularly travelled to Asia for medical treatment, striking pilots were ordered to fly the 87-year-old leader on a charter Air Zimbabwe flight to Johannesburg to catch a connection to Singapore. Mugabe, unlike his colleagues in government, shuns medical treatment in Zimbabwe or South Africa.

The Air Zimbabwe board said recently it needs to upgrade the small national fleet, but did not have sufficient funds to do so.  Many  economic analysts in Zimbabwe say that the airline is a financial drain on the economy and should be privatized.

Air Zimbabwe officials in Harare and London say many travelers lost confidence in the airline’s reliability after the pilots' strike.

But since Zimbabwe's unity government came to power 27 months ago, tourism has revived and many foreign tourists travelled to and around the country with Air Zimbabwe.

The airline continues to operate locally and with its Johannesburg to Harare flights. 

Zimbabwe struggles to raise foreign loans to repair infrastructure devastated under Mugabe’s rule, before the unity government was formed.  Finance Minister Tendai Biti has said that Zimbabwe has a cash economy, and that he has to run the country on tax revenues, which have slowed this year.

The Zimbabwean government is unable to access loans from the International Monetary Fund because it is in arrears and because of U.S. and European sanctions imposed in 2002 after violent elections.

Air Zimbabwe leases aircraft from Zambia for its domestic and regional routes.

Zimbabwe - Air Zimbabwe said Tuesday it had leased aircraft and flight crews from Zambia after reaching a deadlock with its striking pilots and cabin crews. Zimbabwe's airline's pilots and flight attendants went on strike over three weeks ago, demanding payment of overdue salaries and allowances amounting to US$ 12 million. Despite the strike being ruled illegal by the courts, the striking workers have refused to go back to work, insisting on payment of their salaries and allowances. Air Zimbabwe, which is saddled with huge debts of more than US$ 100 million, has said it was unable to settle the salary arrears and appealed to the workers to go back to work to save the airline from imminent collapse.

Airline chairman, Jonathan Kadzura, said Air Zimbabwe had leased aircraft and cabin crews from Zambezi Airlines of Zambia to service domestic and regional routes as a stop-gap measure.

He said domestic routes to be covered were from the capital, Harare, to the second city of Bulawayo and the country's tourism hub, the Victoria Falls.

Among the regional routes would be South Africa and DR Congo, as international routes to London and Beijing, among others, remain unserviced.

Zimbabwe possibly will permit Return of International Airlines, Independent Says

Harare-Zimbabwe may possibly approve proposals from nine airlines to resume flights to the country, the Zimbabwe Independent reported, citing Annajlia Hungwe, spokeswoman for the Civil Aviation Authority of Zimbabwe.
Air France, KLM, Austrian Airlines, Egypt Air, Swiss Air AG, Bulgarian Airlines, Qantas Airways, Emirates Airline and Lufthansa applied to fly to Zimbabwe again, the Harare-based newspaper cited Hungwe as saying on its website.
Eighteen airlines stopped flights to Zimbabwe over the past decade because of a political and economic crisis in the southern African country, the newspaper said. Zimbabwe rejected applications from airlines in South Africa, Malaysia and the United Arab Emirates in 2008, it said.
please visit our website: http://www.cheapzimbabweflights.com/ and you can also contact us on our 24/7 reservation # 02079936219. 

Qatar Aairways increasing flights to tanzania and east africa!

Tanzania – Rapidly growing tourism in Tanzania and East Africa, Qatar Airways has increased its flights in the East African region with additional flights across the two capital cities of Dar es Salaam and Nairobi in Tanzania and Kenya, respectively.

As part of the Doha-based airline's growth strategy, Tanzania and Kenya have been marked strategic destinations in Africa with a step to increase its frequency on existing routes to 12 flights per week, which is a strong lever to facilitate growth in the business and tourism sectors in this part of Africa.

Dar es Salaam, on the immaculate beaches on the shores of the Indian Ocean, is currently served daily and has already received an additional four flights a week from January 2, this year. An additional flight will commence from February 14 to make its flight frequency up to 12 weekly services.

On the other hand, the daily Nairobi-Doha flights have increased to 12 flights a week. From January 3, an additional two flights will take capacity up to double daily. The expansion comes after five successful years of operations to Kenya's capital city.

"We have been serving Nairobi since November 2005, and this has proved one of our biggest success stories in Africa, so we are extremely pleased to be offering our passengers even more choice with additional frequency going to double daily," Al Baker added.

Both routes are operated with an A320 aircraft, featuring 12 seats in Business Class and 132 Economy seats.

The African subcontinent is one of Qatar Airways' largest markets by the number of destinations served, and the region alone makes up over ten percent of the airline's international network.

The award-winning, Doha-based airline currently flies to 17 cities across Africa, including Alexandria, Algiers, Cairo, Luxor, Casablanca, Cape Town, Johannesburg, Khartoum, Lagos, Nairobi, Dar es Salaam, Douala, Seychelles, Tripoli, and Tunis, Zimbabwe, Ghana.

From each of these cities, the airline offers convenient connections via its Doha hub to many points on the airline's network covering Europe, Middle East, Asia Pacific, and North and South America and somewhere code share flights connected.

The airline currently operates a modern fleet of 93 aircraft to 95 key business and leisure destinations across Europe, Middle East, Africa, Asia Pacific, North and South America. The latest addition was the French Mediterranean city of Nice in November last year.