HARARE – Government has finally given debt-saddled Air Zimbabwe the green-light to seek an investment partner to help in its revival efforts.
Presently, the airline is struggling to service a lease agreement of $200 000 per month per plane for the two A320 aircraft leased from China Sonangol since 2012 and it has also been failing to pay its employees timeously.
Transport minister Jorum Gumbo, recently revealed that Cabinet has finally agreed on the urgent need for a new investor to help the ailing airliner.
Gumbo said this while responding to questions on how government was planning to replace the old fleet of planes.
“The solution to the problems raised is through capitalisation of the airline. However, due to the limited fiscal space, my ministry, as guided by Cabinet, is in the process of engaging a strategic partner for the airline,” Gumbo said.
“I want to let you know that yesterday (last Tuesday), government gave us the go ahead as a ministry, to negotiate and engage a partner to partner Air Zimbabwe. We have already started the process of engaging a partner because on our own we cannot pull through.”
Accusations of mismanagement and corruption have for long been associated with Air Zimbabwe resulting in its placement under judicial management in 2012.
In its glory days, before the financial crisis crept in, the national airline could afford to buy Boeing aircraft from Lufthansa.
It also had on its radar, 31 destinations, which included the United Kingdom, United Arab Emirates, and several others in Africa.
Now, there are only six destinations, Harare included, that the airline services.
In a bid to make Air Zimbabwe attractive to investors, government agreed to take over the flag carrier’s $300 million debt, which however, keeps on growing.
The choices, according to Gumbo, are either to close shop or fight for survival, government chose the latter.
“… You have to make a decision to pull out or remain in the business. So, we have remained in the business with those payments that we have to make,” said Gumbo.
During question and answer session, MPs William Mutomba, Jane Watson and Eddie Cross bombarded Gumbo with questions on the deal between Air Zimbabwe and Sonangol.
Gumbo admitted that the deal between the airliner and Sonangol was now not competitive.
“The fact that a contract of $200 000 was agreed upon meant that by that time, it was possible to meet the repayments but as of now, like I am putting it, not only Air Zimbabwe but the world over, the aviation industry is finding it very difficult to make ends meet,” said Gumbo.
“They are actually pestering us for the payment and I have the overdue account of the repayments that we have not been able to meet. This is why my response to…Mutomba was that it is either we can pull in or pull out because I know we owe the company the money payable at $200 000 a month.
“The answer that I was given is that when the deal was sealed, by that time that price was competitive and I have also stated that at this time, as we speak, business in aviation is bad and we are not doing well. So, that is the reason why we are failing to make payments otherwise at the time the deal was sealed, the arrangement was good and acceptable.”