HomeBusiness DigestAirZim turnaround a daunting task

AirZim turnaround a daunting task

Paul Nyakazeya

WEIGHED down by years of mismanagement, poor industrial relations and bureaucratic bungling, a new substantive Air Zimbabwe CEO will have a daunting task of improving operations at the national airline.

The airline is heavily indebted and morale among the staff is at its lowest ebb. Frequent flight delays and cancellations, loss of luggage, overbooking and shoddy passenger treatment are regular complaints from travellers.

Aviation experts who spoke to businessdigest this week said the problems were symptomatic of bigger issues, which include mismanagement, poor industrial relations resulting in low productivity and disparity between revenue and expenditure.

“When such things are not in order, human beings tend to display passive resistance. How do you expect someone who has not been paid to smile or offer you a pleasant service?” a senior manager at the airline asked. “An airline is usually strong at home, but in Zimbabwe a lot of people cannot afford to fly, necessitating a deliberate strategy to grow the market outside of the country’s borders. However, since mid-2007 the contrary happened. Management pulled out of a lot of both profitable and potentially profitable routes such as Malawi, Dar-es-Salaam, Dubai and Nairobi.”

The airline also briefly ran domestic operations in the Democratic Republic of Congo in partnership with Ligne Aérienne Congolaises, the DRC national airline. The DRC operation was described as “costly but highly profitable”, providing the airline with enough liquidity to service its debts and commitments as well as pay its staff.

The pullout was not supported by a strategy to retain market share enough to offset both operating costs and fixed costs. This resulted in extreme erosion of the revenue base while the cost-base increased along with the attendant spiralling debts.

Among the critical creditors is  International  Air Transport  Association (IATA) which is owed nearly US$4 million. To reduce exposure to the defaulting airline, IATA suspended Air Zimbabwe from its clearing house which effectively means that the airline cannot feed into other airlines or accept traffic from other airlines through interline arrangements.  Such arrangements mean that Air Zimbabwe cannot sell tickets on behalf of other airlines and vice-versa.

This effectively means the airline can only carry point to point traffic. As a result of this, passengers including government officials shun the national airline in favour of more networked foreign airlines.

“Airline business is all about interlining which makes it easy for passengers to connect and is cheaper for individuals whose destination involves more than one flight as they will hold one ticket. As it stands, Air Zimbabwe is operating like an army of one person,” an aviation source said.

Aviation experts say Air Zimbabwe was not a total right off and could still be profitable if properly managed. Some aviation experts are of the opinion that a majority stake in the national airline should be sold to a strategic partner that is financially sound.

A recent investigation by parliament unearthed that the national airline was operating on an overdraft, unable to service its planes or retire delinquent debts estimated at US$64 million. The parastatal is said to be operating at a loss of US$2 million per month.

Air Zimbabwe has pulled out of 18 routes from 25 and scaled down on the number of flights per week to “rationalise operations and contain costs”.

While the airline was withdrawing from these routes citing “viability” challenges, its competition has stepped in to fill the void.

Kenya Airways now flies to Harare 12 times a week between Harare and Nairobi while Ethiopian Airlines now flies into Harare daily.

South African Airways also plans to increase frequencies from two to three a day on the Harare — Johannesburg route while the national airline is struggling to operate its two daily frequencies with regularity and punctuality.
The reduction of routes and frequencies impacted negatively on the utilisation of resources, as the airline still found itself faced with same fixed costs.

“What Air Zimbabwe needs to do is to maintain a reasonable amount of money as maintenance reserve. History has shown that this very same fleet can still be used to offer a decent product operating with regularity acceptable in the industry if well maintained,” an engineer told businessdigest on Tuesday.

The engineer cited Boeing 737-200s which are still operational and being used by most companies in South Africa and are said to be in good condition and shape.

“In fact, the airline leases the same equipment whenever they need additional capacity,” insiders said.

Air Zimbabwe has a high turnover of chief executive officers, which has seen names such as Fungai Musara, Huttush Muringi (late), Irishman Brendon Donohoe, Tich Garabga, Rambai Chingwena, Tendai Mahachi, Augustine Mutyambizi and Oscar Madombwe (in an acting capacity) come and go.

The latest in the long line, Peter Chikumba, left on December 31 and has the distinction of being the only CEO to complete his term of office at the airline.

Among the potential replacements are acting incumbent Innocent Mavhunga, Madombwe and the new secretary-general of the African Airlines Association Elijah Chingosho.

It is unlikely that Chingosho would leave his new post for Air Zimbabwe while Madombwe has held the job in an acting capacity on two occasions –– May 2004 to January 2005 and November 2005 – February 2007. He failed to land the job on a fulltime basis on both occasions.

Mavhunga is familiar with challenges at the airline and has the opportunity to show that he can turn the airline’s fortunes if given an opportunity.

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