Although a trip from Bulawayo to Harare on a luxury coach costs no less than $30, Air Zimbabwe was charging the equivalent of $25 for a trip from Harare to London when the actual cost was $800, the Parliamentary Committee on Transport and Infrastructural Development heard.
This was because cabinet had refused to allow the airline to charge fares in foreign currency, insisting that it should charge in Zimbabwe dollars which were depreciating every day.
According to the committee’s report which was presented to Parliament on 16 November 2010 but was only obtained by The Insider last week, the decision by cabinet had seriously affected the operations of the national airline whose debt stood at $64 million as at 25 October 2010.
The airline was still operating at a loss of $2 million a month. Four creditors had taken the airline to court and some had threatened to impound its aircraft to recover their debts.
The report does not state any dates but Zimbabwe stopped using the local currency when the inclusive government was set up in February 2009.
The airline urgently needed recapitalisation to replace its ageing aircraft the newest of which was 22 years old. The average economic life of an aircraft is 15 years.
The airline used to service 25 routes but this was down to eight. To make matters worse it had been kicked out of the International Air Transport Association (IATA) clearing house which meant that it had to operate on a cash basis and could not channel its passengers to other airlines.
But the national airline was in a catch 22 situation because if it closed shop it would never resume operations like Zambia Airways had done. Though management felt the best route was to look for a strategic partner, the national airline could not do so before recapitalisation because it would be negotiating form a weaker position.
The committee urged the government to recapitalise the airline and then look for a strategic partner but at the same time urged the government, “for the good of the airline”, to be only concerned with policy issues and leave the running to the board and its management. It also urged the government to take over the airline’s debt.
‘Air Zimbabwe should charge market value fares and the shareholder (the government) should not interfere,” the committee recommended. “Air Zimbabwe should be run as a company not a department of the Ministry of Transport and Infrastructural Development.”
The committee is expected to hear oral evidence from the airline on the strike by pilots today. The pilots have been on strike for almost a month and say they are owed $9 million in unpaid wages.
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