The government is reluctant to dilute its shareholding in Air Zimbabwe (Air Zim), frustrating the resuscitation efforts to give the airline new wings, Business Times learned this week.
The reluctance by the government to whittle down its shareholding to attract new investors comes as it is also struggling to provide working capital for the national flag carrier. Sources say five prospective investors have so far submitted their bids to invest in the country’s national airline.
A well-placed source told Business Times that the revival of Air Zimbabwe had failed to take off as expected due to continued disagreements between the government and other prospective shareholders.
“The government has not been able to raise the required funds for the revival of the airline,” the source said.
“The judicial manager even suggested that the government dilutes its stake in the airline, but indications are that the government is not willing to do so, and has rather been suggesting going it alone.
“There is a need for seriousness on the part of the government with regards to the revival of Air Zimbabwe, because a national airline remains the pride of any country. Look at the struggles of South African Airways but they keep soldiering on.
National airlines are not necessarily meant to operate on a profit basis,” the source said. Air Zim board chairperson Patrick Chinamasa told Business Times that he was not yet empowered to comment on Air Zimbabwe issues.
“Air Zimbabwe is as you say under judicial management and as such it has no board of directors. I have no authority to comment. I can only become chairman after the company is pulled out of judicial management, and that is the responsibility of the judicial manager Saruchera of Grant Thornton and government,”
Chinamasa, the longstanding politician and former finance minister said, adding: “I therefore refer you to them for comment. I characterise myself only as chairman designate pending Air Zimbabwe coming out of judicial management.”
Saruchera could not be reached for comment while Transport and Infrastructure Development Minister Biggie Matiza is also out of the country. His Permanent Secretary Amos Marawa did not also respond to messages sent to him.
On the investors that have shown interest, Ethiopian Airline, which is Africa’s largest airline, has indicated interest and is the likely front-runner together with a host of other investors.
Already Ethiopian Airlines has offered Air Zimbabwe a lucrative partnership deal that will see the airline bringing planes, train pilots and also assist the national airliner to become an aircraft maintenance hub in the SADC region.
The Ethiopian Airlines deal was proposed when the airlines’ chief executive, Tewolde Gebremarian, paid a courtesy call on President Emmerson Mnangagwa in Addis Ababa, Ethiopia, on the sidelines of an African Union meeting.
Ethiopian Airlines already flies to Zimbabwe, but it is eager to get into a partnership deal with Air Zimbabwe, which was placed under reconstruction under Reggie Saruchera of Grant Thornton and Camelsa due to continuous failure to generate profits to remain commercially viable.
The airline is currently saddled with a US$341m foreign and domestic debt which has been accumulated over a decade of mismanagement. The inability to repay the debt has left the airline in a quandary as it is now stripped of its international aviation privileges.
It is estimated that Air Zimbabwe’s passenger numbers have gone down to about 230,000 per annum in the past few years.