HomeBusiness DigestAir Zim in US$24 million debt for servicing Boeing fleet

Air Zim in US$24 million debt for servicing Boeing fleet

Paul Nyakazeya

AIR Zimbabwe has accumulated arrears amounting to US$24 million in foreign debt for parts and service supplies for its Boeing fleet, businessdigest

established this week.

Sources at the airline said the arrears were made up of imported spare parts and services rendered for the maintenance of the Boeing 767 planes last year.

The arrears have cast a pall over Air Zimbabwe’s turnaround programme which started last year.

The turnaround was based on the need to implement an aggressive marketing programme, recapitalisation and restructuring of the airline.

“Air Zimbabwe has continued to remain in a crisis mode with areas requiring attention being attended to on an ad hoc basis,” the source said.

“This has crippled operations as some international suppliers and manufacturers are no longer keen to do business with us,” added the source.

The sources said the crisis at Air Zimbabwe could be blamed on the mismatch between the US dollar cost and the Zimbabwe dollar revenues derived from ticket sales.

The airline was last year heavily criticised by the central bank for huge “cost structures” made up predominantly of high finance charges.

Agency and handling fees which are too high at 8,86% of revenue and also averaging 5,14% of total cost and labour related costs of 22,94% to revenue and 14,24% of total cost showing poor recovery strategies.

Air Zimbabwe spokesman David Mwenga could not immediately comment on the issue when contacted, instead requesting written questions which he had not responded to at the time of going to press.

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