The Government is in the process of procuring a new fleet of small aircraft for Air Zimbabwe at an estimated cost of $770 million, Transport and Infrastructural Development Minister Dr Joram Gumbo has said.
Of late, concerns have been raised that Air Zimbabwe was operating old equipment compared to its competitors and this was increasing the airline’s operating costs and compromised on service quality and reliability.
“The airline, at the very least, requires aircraft suitable for domestic, regional and international routes at an estimated cost of $770 million.
“This will involve procuring three small jets for the domestic market and an appropriate mix for other regional and international aircraft in line with the airline turn-around strategy,” he said while responding to questions in Parliament last week.
“Government is in the process of acquiring a new fleet of the national airline which suits local, regional and international market. This will greatly improve adherence to schedules by the airline.”
Dr Gumbo said Air Zimbabwe, which is scouting for a strategic partner is in urgent need of recapitalisation to start sustainable operations. As at December 31, 2016, the parastatal had a debt amounting to $323 million.
Dr Gumbo said given the prevailing demands on the fiscus, it was not conceivable that the Government could inject the required capital into Air Zimbabwe anytime soon, thus the need for engagement of a strategic partner.
“Recapitalisation of the airline will enable it to contribute positively towards both tourism and economic growth.
“A strategic partnership increases scope for capacity development through acquisition of new fleet, skills transfer, marketing of trade and business opportunities for the country and boosts tourism potential,” he said.
“Government has recently approved the engagement of a strategic partner for our National Airline. The process has started in earnest and my ministry is committed to the exercise.”
Last year, the Parliamentary Portfolio Committee on Transport and Infrastructural Development chaired by Mr Dexter Nduna who is also the legislator for Chegutu West presented a report to Parliament indicating that Air Zimbabwe was technically insolvent.
The committee said that Air Zimbabwe was generating an estimated revenue of $2.65 million a month against an operational expenditure of $5.94 million.
It said Air Zimbabwe has failed right from the onset to implement what they had proposed as a strategic plan to mitigate the financial challenges.
According to the committee, the airline’s operational challenges were arising from a number of factors ranging from high operational costs, low load factors and an accumulation of a huge financial debt.
Air Zimbabwe requires a minimum capital injection of $1.068 billion.
In 2014, Air Zimbabwe board submitted a strategic plan that sought to bring back the national airline to sustainable profitability through a three-phased approach.
And due to lack of the company’s audited financial reports and internal controls, this had also led to the present financial situation facing Air Zimbabwe.