HomeBusiness DigestAirZim can't charge fares in forex: RBZ

AirZim can’t charge fares in forex: RBZ

Paul Nyakazeya

THE Reserve Bank of Zimbabwe (RBZ) has rejected Air Zimbabwe’s appeal to charge fares for regional and international routes in foreign currency.

The Reserve Bank rejected the proposal last month saying if approved all parastatals whose operations were currently depressed would request for the same privilege.

Senior officials at the national airline told businessdigest on Wednesday that Reserve Bank governor, Gideon Gono, had told Air Zimbabwe that it was not possible for them to be allowed to charge in foreign currency.

He is also understood to have told the management at the airline that there was no guarantee that they would perform well even if they charged in foreign currency.

“The feeling was that there was more to Airzim’s problems than foreign currency shortage,” said a senior official with the AirZim who was part of the negotiating team that met the central bank last month.

“The RBZ said approving the proposal would open the floodgates for other parastatals to seek a similar dispensation,” airline officials said

“The RBZ felt that since most Zimbabweans earn in local currency charging them in foreign currency was as good as encouraging them to use the parallel market,” the official said. Air Zimbabwe did not respond to questions sent to them by yesterday. RBZ said charging in foreign currency would disturb the equilibrium which prevailed between foreigners and locals who are also required to pay departure fees in foreign currency.

“Air Zimbabwe’s passengers had been increasing significantly over the years and charging in foreign currency will trim down the catchment area which still needs to be expanded to achieve the airline’s turnaround goals,” the official said.

Last August the national airline submitted proposals to RBZ to be allowed to charge in foreign currency.

The airline said it was facing an acute shortage of foreign currency to buy spare parts and service external debts running up to US$20 million.

In their proposal Air Zim said about 80% of its operations per month required foreign currency but they were accessing a quarter of requirements.

Giving oral evidence before the parliamentary portfolio Committee on Transport and Communications in November last year, Air Zimbabwe board chairman, Mike Bimha, said the move, if approved, would help address problems facing the airline.

“We cannot continue to ask the RBZ to give us foreign currency. Most passengers travelling to Dubai have foreign currency yet they pay in local currency,” said Bimha.

The proposal received backing from the Zimbabwe National Chamber of Commerce (ZNCC) and Confederation of Zimbabwe Industries (CZI) leaders.

ZNCC president, Marah Hativagone at the time said: “We have been talking about this issue for a long time now. They (Air Zimbabwe) buy fuel and spare parts in foreign currency and they should be allowed to charge fares in foreign currency for them to be viable. As it stands now, Air Zimbabwe is just subsidising us.”

She dismissed assertions from some sections that Zimbabweans do not have foreign currency.

“Right now foreign currency is awash in Zimbabwe but it is being suppressed. We pay in foreign currency when using other airlines, but we are starving our own airline. If people can pay other airlines in foreign currency, why can’t they pay Air Zimbabwe?” she said.

CZI president, Callisto Jokonya, also supported the idea saying: “I do not have an objection to that proposal as long as it will enable them to be viable. Anybody in Zimbabwe must be allowed to charge in foreign currency. We import raw materials in foreign currency and that is the best that can be done. Why should Air Zimbabwe be stopped?”

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