Govt mulls Air Zim, Zim Airways merger

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Bernard Mpofu

GOVERNMENT is now considering merging Air Zimbabwe (AirZim) and Zimbabwe Airways in a development that seeks to bring to an end the growing tension between the two state-owned airlines, it has been established.

While national carrier AirZim continues to be in an abyss due to huge debt and competition from new airlines, Zim Airways on the other hand is trying to complete its registration process with the country’s aviation regulator.

Aviation sources who spoke to Business Times said delays and hurdles in making Zim Airways a fully operational entity had made government consider merging the two entities.

“There has been communication between the Ministry of Finance and Transport ministry to merge the two airlines. But for now they must regularize Zimbabwe Airways first in terms of the Public Finance Act through the Office of the Auditor General and Accountant General,” a source said.

“This will result in the two boards being merged and the proposed business plan will see Air Zimbabwe flying to regional destinations while Zimbabwe Airways, which already has bigger aircraft, take long haul flights.”

Sources added that in the coming few weeks Air Zim will take delivery of its Embraer jet as the airline begins its turnaround strategy. Early this year government approved the Air Zim strategy.

Transport minister Joram Gumbo confirmed the development.

“That is very true, what we want to do is to make Air Zim fly local and regional routes such as Angola and the Democratic Republic of Congo because of the equipment it has. Zim Airways on the hand will fly international routes because it is currently leasing the bigger jets. Ultimately we would want Zimbabwe to be a regional hub,” Gumbo said.

Government bought four Boeing 777-200 planes from Malaysia Airlines through their sole agent PricewaterhouseCoopers Kuala Lumpur for its special purpose vehicle called Zimbabwe Avaition Leasing Company which would in turn lease out the aircraft to Zim Airways.

In October 2016, government entered into an agreement with Malaysian Airline System Berha for the sale and purchase of the four aircraft. But government later decided to buy two Boeing 777s for $18,5 million and $16,5 million and later resolved to buy two Embraers using treasury bills.

In March of 2016, government instructed the AirZim board to consider winding down Air Zim to pave way for Zim Airways.

Other legal options that were included judicial management, reconstruction, name change and becoming a successor company.