In 2015, a report released by the Auditor-General revealed that the Ministry of Transport had been raiding a fund called the “New Number Plate Revolving Fund” to pay Air Zimbabwe’s debts.
The ministry had raided the fund to the tune of US$30 million in that year after fleecing US$23 million from the same fund between 2012-13, all this without Treasury’s approval.
The national airline was broke as usual; the effects of decades-long mismanagement and plunder. The total amount pillaged from the number-plate fund might never be known, suffice to say it was very likely the genesis of the number-plate crisis the country faces now. Because the whole process was illegal, it is also very likely that not all the money was accounted for properly; most of it could, in fact, have been looted.
This is why last week’s report indicating that there had been attempts to draft the private sector into funding the airline shocked all right-thinking Zimbabweans. AirZim administrator Grant Thornton, was vague about how this would work. But it is clear that the chartered accounting firm wants the government to impose a tax on industry to get the airline running.
If the government gets tempted by prospects of a windfall and accepts this worst form of unfairness, it will inflict more pain on already overburdened companies. The worst thing that Zimbabwean firms expect now are new taxes. Any amount of money thrown into the airline will not return it to its heyday when it carried one million passengers annually. AirZim needs nothing short of a radical cultural shift before any new money is thrown its way.
The present model, which is pursued across Africa, where national airlines are funded by States, has failed. The disastrous collapse of airlines across the continent demonstrates what happens when shareholders enforce bad models.
The myth that national airlines must only break even to facilitate trade and tourism has been exposed for what it is — just a myth.
As seen through the catastrophe at Airzim and others, governments have destroyed assets, and will continue to do so, unless they realise that these assets must be commercial entities. The government must guard against forcing firms to fund other firms.
Zimbabweans have been shocked that even consultants have failed to read the markets. A proper consultant would tell the government to ground its antiquated planes and go back to the drawing board.
A good consultant would tell AirZim to look beyond strategic partnerships and pool resources with other regional airlines and build one strong operation that serves the partners’ tourism industries and supports trade.
This is not a new concept. It has been tried elsewhere with remarkable success. Instead of clinging on to a bad asset, the government must start looking at new models to build a stronger airline.
Public companies must not ride on the sweat of others; they must work hard to attract customers. AirZim should not be an exemption to this golden rule.