Air Zimbabwe administrator Reggie Saruchera, has said they expect the revival of the national airliner to come full circle by May 30, 2019.
Saruchera, a managing partner at Grant Thornton and Camelsa, said the first of several key meetings is set for next week (November 27).
“The reconstruction programme is not open-ended. Next week on the 27th we will have a meeting of members where we will present a comprehensive report to the shareholder (Government) and also on views on how the airline can be turned around.
“And on the 28th, the first meeting of creditors will be held where both foreign and local creditors are coming.
“We have already invited bids from local, regional and international investors. Final bids will be submitted by February 11, 2019, and we should be able to select a final bidder by February 25,” he told a Parliamentary Portfolio Committee on Transport and Infrastructure Development on Monday.
“We are targeting to then convene a Scheme meeting on April 24, 2019 so that we meet all the creditors and shareholders and then agree on scheme of reconstruction, which all can agree to. When that has been signed we can then allow the company to operate.
“Two months after the Scheme of Reconstruction has been running then we will apply to have the company removed from reconstruction. And in this respect we are targeting a date of May 30, 2019.”
The national airliner was placed under reconstruction due to continuous failure to generate profits to remain commercially viable.
And a critical part of the reconstruction is the coming in of a private investor.
But the administrator has indicated the need for a contingency plan.
“In the meantime, while we are looking for a strategic investor, because we might not get one, we need to do what we have to do as the major shareholder to make sure that the airline has been capitalised and efficiently servicing the domestic and regional routes,” said Saruchera.
The reconstruction plan is expected to see the national airliner operating at least four planes, servicing the domestic and regional markets.
“Air Zim needs smaller planes”
Saruchera said the airline has been running inefficiently with the two large planes servicing short haul routes.
“We are looking at two small planes, 50 to 70 seaters as well as two middle-range 100 to 130 seaters. And if we have those four planes, we will be able to effectively service the domestic and regional markets and also be able to generate money, a profit of around $3 million to $4 million.
“Our major markets in the region are South Africa (we want to go to Durban and Cape Town, and link up with Victoria Falls). We currently go to Tanzania (Dar es salaam), and we want to go to Malawi (Lilongwe) and the Democratic Republic of Congo. These are areas we need to focus on.”
A broken down fleet
Air Zimbabwe currently has a fleet of 11 planes, the majority of which are grounded.
These include three MA60s (all grounded), three B737-200s (of which only one is flying), three Airbus A320s which are being leased but are grounded), and two Boeing 727s (one which is currently servicing the Johannesburg route).
Of the non-operational fleet, Saruchera said only one of the MA60s is can be fixed at a cost of $1,6 million, but added that such a move would be “moving backwards”.
He said the Boeing 727s are “still very serviceable” but are too big for the short-haul routes they are plying in the region.
He said the Airbus A320s (grounded) that Air Zimbabwe is leasing are expensive to run as the airliner’s maintenance unit was designed for Boeing planes.
Air Zimbabwe is currently saddled with a $371 million debt, of which $30 million is foreign debt.
The foreign debt has left the national airliner stripped of its international aviation privileges, which Saruchera said it needs to expediently recover if it is going to operate viably.
For instance, in 2012 Air Zimbabwe was removed from the International Air Transport Association (IATA). It currently owes IATA $4,2 million.
He said the Government is working to restructure the debt, but emphasized that the “debt assumption must be tied in with the Scheme of Reconstruction.”
We have told Treasury not to throw money at a problem. As we restructure the debt we then capacitate the airline with the right aircraft at all levels so that it begin to run efficiently,” he said.
The national airline posted a $14 million loss up to August 2018.