Air Zim Losing Millions

Air Zimbabwe Chief executive Peter Chikumba told RadioVOP after his address to parliament’s portfolio committee on Transport on Tuesday that the national airline was suspended from the IATA clearing house in March 2009, meaning that almost US$2 million could have been lost by the end of this year.

Interlining (also known as interline ticketing) is a voluntary commercial agreement between individual airlines to handle passengers traveling on itineraries that require multiple airlines.

“We are losing between US$800 000 to US$1 million potential revenue per annum due to non-interlining. These are potential annual earnings being lost because we are outside the IATA interlining agreement,” Chikumba said in an interview.

Zimbabwe was suspended from the international interlining agreement because of a huge debt overhang.

“During the Zimbabwe dollar era, all Air Zimbabwe payments had to be channeled through IATA for the other creditors to be assured of payment, it was because of that interim measure. Anything we needed to buy had to go through there where as the normal requirement is for IATA clearing is for interlining purposes but we hope to be back in the clearing house by January next year. But we need to pay all the creditors first,” said Chikumba.

Chikumba said the troubled Air Zimbabwe owes about US$400 000 to workers the airline tried to retrench last year. The labour court ordered Air Zimbabwe to reinstate the workers. Chikumba said the 400 plus workers were now back on the airline’s payroll but they had not been paid their dues from November last year to March this year.

Debtors were stalking around the national airliner following the strike by pilots last month, Chikumba said.

“These issues fall under the company’s under-capitalisation which therefore is not in a position to meet its obligations and one of those obligations is to pay its highly skilled personnel. This is a business that is currently embedded in a situation where the cost of operations is above the revenue being earned,” said Chikumba.

Air traffic has fallen by almost half from 82 000 in 1999 to 30 000 last year leaving Air Zimbabwe reeling from reduced revenues against high operational costs.