eBusiness Weekly
Taurai Togarepi
Finally, Government has taken a bold step towards reforming its perennial loss-making parastatals. A general lack of political will in the past cost tax payers several millions of dollars in bailouts to institutions such as Air Zimbabwe that have failed to effectively recover.
Most of the parastatals have year after year operated in the red and tax payers had been forced time and time again to come to their rescue.
It is saddening to note that this has been happening at the expense of critical projects which could have helped in uplifting the standards of living for most Zimbabweans.
One takeaway from recent news reports is that Government will have at least two parastatals in the local aviation space in the foreseeable future, namely ZimAirways and Air Zimbabwe. Both will manage a fleet of largely obsolete planes.
What is interesting is that, the supposed solution to turnaround Air Zimbabwe involves use of “second-hand” planes that have been decommissioned by another airline.
This is a sign that the local airline industry should be left to those that have deep pockets to operate as it requires huge capital injection to acquire efficient planes.
Government should just keep a strategic shareholding in the airline industry as opposed to owning 100 percent of a skeleton.
It’s certainly much better to hold equity of between 10 percent and 25 percent of a company that is operating profitably and services its routes timeously, thus effectively competing with private players.
For some time now, Air Zimbabwe has been in the public domain for the wrong reasons, characterised by cancellation of flights, delays, high turnover of management and board members, as well as frequent visits to the Treasury for bailouts.
The following are some of the stories about Air Zimbabwe:
2 June, 2014: Zimbabwean national airline Air Zimbabwe has successfully received their re-registration certification from IOSA after being de-registered in September 2012. The airline has passed the IOSA safety audit and can now resume international flights on all their routes.
July 2013: On a flight from Victoria Falls to Harare, an Air Zimbabwe B737-200 carries one passenger over its seating capacity of 105, with the additional passenger sitting on the jump seat in the cockpit.
16 December, 2011: Air Zimbabwe has suspended flights to South Africa over fears that its planes may be confiscated, to pay its outstanding debts. Air Zimbabwe’s acting CE, Innocent Mavhunga, said: “We are not flying into South Africa. We are trying to secure funding to pay our debts in South Africa.”
The creation of Zimbabwe Airways is just like someone trying to hide behind a finger.
There is need for a comprehensive reform programme to turnaround Air Zimbabwe. The truth of the matter is, Air Zimbabwe’s business model is unsustainable with the current fleet and a bloated staff complement. The struggling national airliner is a bogged down by huge debts extending to the millions.
It is high time Government draws lessons learnt from other countries that have successfully implemented parastatals reforms, particularly national airlines.
Ethiopia successfully turned around its airline industry and is now one of the best airlines on the continent.
