Gono, AirZim in crisis talks

Dumisani Muleya

RESERVE Bank governor Gideon Gono on Wednesday summoned the Air Zimbabwe board for a crisis meeting to discuss the national airline’s deepening problems.



Verdana, Arial, Helvetica, sans-serif”>Aviation sources said Gono summoned the board after the troubled airline – which broke aviation records in May by flying one passenger thousands of kilometres from Dubai to Harare – continued to extend the begging bowl for foreign currency and local funds to the central bank.


Sources said President Robert Mugabe’s office and a chain of ministries had been making desperate efforts to save the airline from sinking.


“Gono summoned the Air Zimbabwe board for a crisis meeting to discuss the airline’s worsening problems. Reserve Bank authorities read the riot act to the board members, warning them their borrowings had become unsustainable,” a source said.


“Board members were also told that the airline must develop its own survival and viability strategies and borrow money from commercial banks instead of the central bank.”


Gono yesterday confirmed summoning the Air Zimbabwe board.

Documents obtained from Air Zimbabwe show the airline has largely been surviving on Reserve Bank hand-outs. They also show that between August 15 and December 7, the airline borrowed US$13 million and £378 591 from the central bank.


But between October 1 and December 5 the airline only managed to generate and deposit with its Jewel Bank foreign currency account US$732 285.


The borrowed forex was used largely to pay Air BP International for fuel, aviation insurance, auxiliary power unit, and IATA for clearing charges.


Air Zimbabwe has so far received $722 billion for working capital and servicing its overdraft facility with the central bank’s Parastatal Re-orientation Programme, which started in February.


On November 22, chief secretary to the president and cabinet, Misheck Sibanda, convened a meeting of top government officials to tackle Air Zimbabwe’s problems. This followed a meeting held the previous day between Air Zimbabwe and fuel companies to deal with the airline’s fuel requirements. Air Zimbabwe needs 800 000 litres a week.


The November 21 meeting noted the airline was facing serious problems due to Jet A1 fuel shortage and that it was relying on borrowed fuel from other carriers. It was said borrowing fuel had become unsustainable as other airlines’ reserves had also become “critically low”.


For instance, it was noted British Airways’ fuel stocks had fallen to 100 000 litres against its weekly requirement of 800 000 litres. Airlines flying into Zimbabwe are currently bumping off passengers from their flights to accommodate extra fuel to avoid being grounded in the country due to fuel scarcity.


British Airways (operating as Comair in South Africa), South African Airways, as well as smaller carriers like SA Airlink and kulula.com, now rely on contingency fuel plans to fly into Zimbabwe. Booked passengers were bumped off a Harare-bound Comair flight at Johannesburg airport on Sunday to accommodate more fuel.


The November 21 meeting resolved Air Zimbabwe should enter into fuel hedging contracts to ensure it did not get grounded due to the fuel crisis. It also decided the airline should buy fuel from neighbouring countries.


The November 22 meeting also focused on the Air Zimbabwe fuel crisis and cabinet’s decision eight months ago that the National Oil Company of Zimbabwe should import fuel for the airline. An advisory committee to assist the permanent secretary for Transport and Communications on the Air Zimbabwe issue was established.


Air Zimbabwe, run down through extended periods of mismanagement and under-capitalisation, now only has eight planes, two of which are not operational, compared to the 18 planes it had at Independence in 1980.


After scrapping 12 regional routes, the airline still flies to Johannesburg, Mauritius, Lusaka, Lilongwe and Nairobi.
 
Locally, it flies to Bulawayo, Victoria Falls and Kariba after pulling out of the Masvingo, Hwange and Buffalo Range routes. Internationally, it goes to London, Dubai and Beijing.

© 2018 ALPHA MEDIA HOLDINGS. All rights reserved.
Powered By AMH Digital
Top