HARARE – With critical losses having washed out cash and the national airline sinking deeper into financial dire straits, it remains to be seen how quickly the anchor shareholders of the stuttering carrier — the government — will come up with a rescue package.
The ongoing financial crisis exposes the airline to too many risks, especially as far as creditors are concerned.
Air Zimbabwe chief executive Ripton Muzenda told a parliamentary portfolio committee on Transport and Infrastructure Development chaired by Chegutu West Zanu PF MP Dexter Nduna yesterday that they had come up with a turnaround plan based partly on engaging two strategic partners, re-branding the airline by year-end, as well as acquiring various airline certifications, to ensure the safety of passengers and cargo, to do this.
The stone-broke government recently announced it would pump cash into the airline but has so far failed to lend the pledged undisclosed support.
While such financial help will be timely in dealing with day-to-day expenses in the coming months, what the airline needs most is cash to amortise its long-term liabilities.
Re-branding and working towards gaining International Air Transport Association (Iata) readmission by May 31, this year is not bad. But after that, what next?
The priority now is commitment by shareholders on the long-term liabilities and financing the strategic plan.
The government urgently needs to fast track the process of engaging a strategic investor with the expertise and deep pockets to tackle short and long-term issues.
The carrier’s capital has been seriously eroded. To assuage restless creditors, the two shareholders being touted by Muzenda need to move more aggressively to make it clear that they will stand behind the airline at all costs.
The shareholders need to make it clear they remain fully behind the company. The government needs to step in firmly because the airline’s financial health is critical to the performance of tourism and agriculture, especially horticulture exports. These two are crucial for the country’s economy.
With exports performing badly — the current account deficit worsening — an under-performing Air Zimbabwe is a prospect the administration of President Robert Mugabe must be unwilling to countenance.
Muzenda acknowledged the airline was facing turbulent times, forced by the Labour Court to rehire 300 workers it retrenched last year.
He is a man of faith.
Yesterday, he remained optimistic, waxing lyrical about how the fundamentals for increasing revenues were still in place.
At the end of the runway, Air Zimbabwe needs more capital, period.