Air Zim Sinks Deeper In Debt

“Our cost of operating the business sits at about US$6 to US$7,5 million,” Air Zimbabwe Chief Executive Officer Innocent Mavhunga said Tuesday.

“Our income is between US$2,5  and US$3,5 million. So simple mathematics would tell us there is a deficit averaging US$3,5 to US$5 million every month.”

Mavhunga was presenting oral evidence before Parliament’s Portfolio Committee on State Enterprises and Parastatals chaired by Zvishavane-Runde legislator Larry Mavhima on the state of affairs at the airline.

Mavhunga said the parastatal’s debt to date is sitting at US$137,7 million.

He attributed this to government restrictions on charging in foreign currency during the Zim-Dollar era, shortage in foreign currency and “the devastating effects of sanctions” felt by the air line.

Of this debt, US$112,7 is owed to local creditors.

In 2006, Mavhunga said, the airline’s debt was sitting at US$6 million but ballooned over the last five years.

The Air Zimbabwe boss also cited a recurrent strike by the company pilots, high operational costs for its aging aircrafts, diminishing passenger confidence and continued interference into its operations by government as some of the factors militating against the smooth operations of the company.

Mavhuma said the impact brought by the recent prolonged strike on the airline will take up to a year to repair.

According to Mavhunga, Air Zimbabwe has seen a turnover of 12 successive CEOs in the past decade who have all failed to rescue the company from its worsening financial burden due to continued under capitalisation.

Currently, the airline is operating eight aircrafts and of these, three have been grounded due to the fact that they are now beyond service.

The airline is also trapped with a bloated workforce of over 1000 employees and is appealing for government funding to pay retrenchment packages to 400 employees most of whom have agreed to the retrenchment terms proposed by their employer.

Air Zimbabwe last paid its workers in June this year while the continued flight of passengers from the airline has forced it to shrink its destinations.

The airline is servicing three routes regionally namely Harare-Johannesburg, Harare-Lusaka, Harare-Lubumbashi.

Internationally, Air Zimbabwe flies from Harare to countries, Malaysia, China and London while flying from Harare to Bulawayo and Victoria Falls locally.

The Air Zimbabwe boss appealed to government to inherit the entire debt of the airline or give the airline at least US$40 million to restore viability in the next six months.