Zimbabwe News and Internet Radio

Air Zimbabwe to lease out its long-haul aircraft amid US$30 million debt

The national airliner Air Zimbabwe has decided to lease out its long-haul aircraft amid revenue challenges due to huge legacy debts.

The State-owned carrier which came out of reconstruction last year, believes that the move is part of its efforts to consolidate its revenue base as it emerges from the woods.

Air Zimbabwe has a total fleet of seven aircraft including three that are servicing domestic and regional routes like South Africa.

The company is facing huge debts encompassing US$30 million in foreign liabilities and ZWL349 million obligations owed to local creditors weighed on the company.

In an interview with the State owned newspaper Herald, on the sidelines of the CEO Africa Annual Roundtable in Victoria Falls last week, Air Zimbabwe acting chief executive officer Tafadzwa Zaza said they had long-haul aircraft that include the Boeing 777 (B777) they want to lease out.

“And as a strategy we want to lease them out for now while we are consolidating our revenue base, thereafter, when we are consolidated, we can start the international routes.

“We cannot start by operating on the international sector without consolidating on the domestic and regional markets, that’s why we are not operating the B777,” he said.

Zaza would not be drawn into revealing the potential takers for the aircraft that Air Zimbabwe intends to lease out citing confidential issues.

“This is work in progress we are receiving potential takers and we are still negotiating with them, we cannot divulge at this stage because we are negotiating in confidence so once the deal is done you will be advised,” he said, adding that the airline was committed to contributing policy targets to the National Development Strategy 1 (NDS 1).

He said the mandate of the new Air Zimbabwe board, appointed in August this year, was to make sure the airline contributes to NDS 1 through restructuring of the entity and opening of new routes.

“We are on the right track because we are acquiring the other aircraft before the end of the year, and we are working on the new routes that we want to open which I will not talk about right now.

“You will be advised when it’s the right time but we are in the right direction working on opening these new routes,” Zaza added.

In October 2016 Air Zimbabwe applied to the State Procurement Board (SPB) for permission to acquire four B777-200ER aircraft formerly flown by Malaysia Airlines.

After permission was granted in November the government put together enough money to pay for two of the B777s and one Embraer E-Jet but by the time the planes arrived in the country, Air Zimbabwe had deteriorated to such an extent, that it could not present a “credible business plan to run the planes on a sustainable, profitable basis”.

The government registered Zimbabwe Airways, which developed a credible business plan. The government created “Zimbabwe Aviation Leasing Company”, which owns the planes and leases them to Zimbabwe Airways.

The Zimbabwe Airways project was mired in controversy.

In 2019 former Finance Minister Tendai Biti tweeted: “US$ 51 million was paid to Malaysia for 3 aircraft in 2018 but those planes were never seen anywhere. They disappeared.”

In January 2020 Air Zimbabwe eventually took delivery of a 15-year-old Boeing 777-200 bought for US$16.5m from Malaysia Airlines in 2016. The airline said it would use it to revive its London and Beijing routes.

AviaciOnline notes that “In total, there are two Boeing 777-200ERs, which have been idled in Harare since the end of 2020. They carry the markings Z-NBE (msn 28422) and Z-RGM (msn 28421) and are configured in a two-class layout with 247 seats in economy and 35 in business class.”

Another scandal at the parastatal relates to three MA60 planes purchased from China which “vanished into thin air”.

In July 2019 Auditor General Ms. Mildred Chiri confirmed that there is no paper trail to establish what happened to the three planes.

Chiri said that there were 3 MA60 Aircrafts that were not accounted for in the company’s Financial Statements and there was no lease agreement and there was no agreement of sale for the planes.

Air Zimbabwe bought the planes for US$48 Million sometime between 2005 and 2006.

Comments