STRUGGLING national flag carrier Air Zimbabwe (AirZim) is on the verge of concluding a wet lease agreement with a Malaysian company after it emerged that a 10-member team comprising key personnel from the troubled airline flew to the southeast Asian country to oversee the planning of the ferry flight to Zimbabwe.
By Bernard Mpofu
Sources close to the developments said the 10 senior staffers, who include manager-in-charge of flight operations Tawanda Chitsike, senior engineer Lawrence Mashoko, Martin Gwafa (technical services) and Solomon Musikavanhu (flight operations), travelled to Malaysia last week.
“The team will oversee the planning of the ferry flight to Zimbabwe, meaning flying the aircraft from one position to the other without passengers or cargo. Government has negotiated a wet lease as part of its plans to turn around AirZim,” a source familiar with the developments said.
Contacted for comment, AirZim chief executive Ripton Muzenda said it was still too early to comment on the developments at the airline.
Transport minister Joram Gumbo would neither confirm nor deny that AirZim has finally found strategic partners.
“As a ministry we are still busy consulting with potential partners. Once something happens, I will issue a statement,” Gumbo said.
When asked to comment on a video showing an aircraft branded “Zimbabwe Airways”, which was reportedly taxiing at a Malaysian airport, Gumbo said: “We have not yet agreed with anyone, so be patient we will issue a statement.”
A wet lease means that the organisation or person who owns the aircraft will provide that aircraft, as well as one or more crew members to the lessee. More importantly, the owner also promises to conduct adequate maintenance and procures the insurance necessary to operate.
Early this year, AirZim rolled out an ambitious plan to overhaul the company that will see Treasury expunging the airline’s legacy debts, estimated at US$330 million, by way of liquidation before acquiring new planes from Asia and rebranding to Zimbabwe Airways.
After failing to court new investors due to the company’s weak balance sheet, government is now seeking partnerships with international airlines instead of engaging a strategic partner to turn around AirZim.
At Independence in 1980, the airline had 18 planes in its fleet, but today it is operating at less than a third of its all-time peak.
Late last year, government engaged five international carriers from Kenya, Ethiopia, Singapore, Turkey and Malaysia to partner the troubled AirZim with hopes of turning around the fortunes of the ailing and debt-ridden flag carrier.
In 2013, cabinet approved a proposal by the AirZim board to raise US$15 million through 180-day commercial paper.
The airline also proposed the issuance of ordinary shares to raise US$30 million through private placement to local investors and the issuance of ordinary shares and preference shares to international investors and partners.
To clean its balance sheet and settle legacy issues, the then AirZim board, led by banker Ozias Bvute, also proposed the restructuring of the current debt through the issuance of money-market instruments to current creditors. The company also planned to issue 10-year corporate bonds to current creditors and other third-party investors of up to US$200 million to reduce the debt overhang affecting the entity. Following the approval of the plan, officials embarked on road shows, canvassing for investors.
During that same year, the Transport ministry commissioned audit firm Ernst & Young to develop a business plan for AirZim which was approved by cabinet.
Government has already agreed to take over the debts, through the Air Zimbabwe Debt Assumption Bill, to allow the airline and its technical partner to start on a clean slate. Operations at AirZim almost came to a grinding halt when the European Union (EU) banned the airline from flying to Europe, due to its failure to meet the bloc’s stringent safety requirements.
AirZim stopped flying its planes into any of the European countries in 2011 after one of its planes was impounded in London for failing to repay debts.
The national airline is currently operating four planes out of an aged fleet of 10.
Three other airlines, Med-View of Nigeria, Mustique Airways from St Vincent and Ukraine’s Aviation Company Urga, are also included on the EU’s no-fly list.
The four airlines have been blacklisted for operating out-of-date planes and poor government oversight in their respective countries, among other reasons.