Published On: Thu, Oct 20th, 2016

President Mugabe and Chikore look to Buy New Modern Planes

The country’s beleaguered airline, Air Zimbabwe (AirZim), is scouting for modern passenger aircraft and has initiated negotiations for the lease of Boeing 787 Dreamliner planes from a Malaysian airline.

The frantic efforts to secure new planes and routes come after President Robert Mugabe’s son-in-law, Simbarashe Chikore, took over as Chief Operations Officer (COO) and Ripton Muzenda, the son of the late vice president Simon Muzenda, as chief executive officer (CEO).

The Boeing 787 Dreamliner is an American long-haul, mid-size wide body, twin-engine jet airliner manufactured by Boeing Commercial Airplanes.

The current search, which comes hard on the heels of top-level appointments at the national airline, will include a determination of lucrative routes to ensure the viability of any new plane acquisitions.

But there were indications the airline would avoid European capitals due to outstanding aviation debts that once resulted in the seizure of an AirZim plane in London, forcing the parastatal to terminate flights to the country’s former colonial master, Britain.

President Robert Mugabe visited Malaysia, the south-east Asian country, a fortnight ago and was accompanied by the Minister of Transport, Communication and Infrastructure Development, Joram Gumbo, ministry officials, a team of aviation experts and AirZim’s top management.

Gumbo confirmed this week that he had accompanied President Mugabe to Malaysia to explore aviation opportunities.

He told journalists that government, which wholly owns the national flag carrier, was looking for long haul planes.

The airline has already started talks with “technical partners”, whom Gumbo declined to name, although he disclosed that they were currently exploring routes to determine those that were likely to be lucrative to fly the new planes.

“After the discussions that we are having with technical partners, we will have long haul planes. It does not help us to receive planes and keep them at the Harare International Airport without routes. I am trying to scout for routes for Air Zimbabwe. That is why I went to Malaysia. I went to see Air Malaysia to see how they operate. I will also be visiting China and Singapore to see if Air Zimbabwe can connect through these routes to China. I also want to go to Nigeria to see if we can have direct flights to West Africa,” said Gumbo.

The two are understood to have been asked to turnaround the loss-making airline and are reportedly at the centre of ongoing moves to secure planes.

AirZim, which has gone through turbulent times since dollarisation in 2009, is struggling to match competition from established airlines due to the old aircraft within its fleet.

Passenger numbers have plummeted to about 230 000 per annum in the past few years, from a peak of one million in 1996, as travellers opt for other airlines on the four domestic destinations it services.

The airline, currently flying into South Africa, Zambia and Tanzania, has been planning to re-launch the cash-spinning Harare-London flights, but airline executives have warned that without modern jetliners, it would be a waste of time because it would most certainly face passenger resistance.

AirZim’s aged fleet comprises two Boeing 767s, three 737s, three MA60s and two Airbus A320s.

Out of these planes, only four are flying – one airbus, one Boeing 767, one 737 and an MA60.

Airline executives have been pushing for the acquisition or lease of a Dreamliner for its long haul flights, whose network will include China, Malaysia, and possibly Singapore.

The airline came close to liquidation when it stopped flights in 2011 before its sole shareholder took the decision to resume operation in November 2012.

Last month, Gumbo held informal discussions with Ethiopian Airways (ET) executives in Addis Ababa with the hope of entering into a technical partnership.

At the ET discussions, Gumbo travelled with most of his senior officials including permanent secretary, Munesu Munodawafa, director of legal affairs, Angela Karonga, his personal assistant, an official from the Ministry of Finance, Civil Aviation Authority of Zimbabwe general manager, David Chaota, AirZim deputy chairman, Pathias Chironga and Muzenda.

The Zimbabwean delegation was, however, said to have been unhappy after a low level team led by the ET CEO was assigned to talk to them.

In terms of protocol, Gumbo was supposed to meet a ministerial team.

Government officials aware of the talks said after some of ET’s proposals turned out to be unfavourable, authorities were no longer keen to pursue the deal.

“They (ET) had their conditions,” Gumbo told the Financial Gazette.

“Some of them may have been favourable, some of them were not. I am yet to discuss with them officially because I have not been given the authority. There is a vetting process that is going on,” the Minister added.

Sources, however, said the unfavourable conditions in Ethiopia may have caused the President to shift to Asia.

“The objective was to look at some of the available aircraft, but it would appear they were snubbed in Ethiopia. It was clear that our team was desperate to clinch the deal and the Ethiopians may have wanted to take advantage.

“In my own opinion President Mugabe is too proud to play second fiddle to another African nation.

“Hence the option being considered now for which a team travelled to Malaysia,” said the well-placed government source.

“AirZim needs a Dreamliner. It is cheaper to operate and technologically advanced. Both Kenya Airways and Ethiopian Airways are already operating the equipment. We need it for London for us to be able to compete with the likes of Emirates. Regionally and domestically, we need an aircraft like Embraer (70-100) or Bombardier,” the official said.

The 60-seater Embraer, manufactured in Brazil, was briefly operated by AirZim on domestic and regional flights under a lease agreement three years ago.

The Financial Gazette understands that during the recent trip to Malaysia, Gumbo and his team discussed several options with Malaysian government officials and the private sector to find how AirZim could be revived.

This week, Muzenda said government would be in a better position to comment on the negotiations taking place.

“If there are any discussions, they will be taking place at government level. (Government) will be in a better position to tell you. We are just working flat out to sort out the airline, that’s all,” said Muzenda.

Government has not been keen to enter a deal in which it ends up relinquishing majority control in the national flag carrier.

In 2013, British multi-millionaire, Nicholas van Hoogstraten, proposed a transaction which would have seen him availing an undisclosed sum to the flag carrier for aircraft acquisitions and repayment of debts in Europe.

The move was meant to facilitate the re-launch of flights on the Harare-London route.

The property magnate, a significant shareholder alongside government in Zimbabwe Stock Exchange-listed Hwange Colliery Company Limited and listed-hotel chain, Rainbow Tourism Group, had agreed to a proposal by the AirZim board, but had made several conditions, which the board turned down.

If the board, and consequently government, had agreed to the deal with van Hoogstraten, the British tycoon would immediately have injected up to US$15 million in working capital for the resumption of the Harare-London flights.

AirZim was expected to deploy the cash to settle an overdraft facility estimated at about US$2,5 million then and channel at least US$3 million towards unpaid landing debts in London.

Van Hoogstraten had agreed to purchase two new Boeing 777 aircraft for the Harare-London flights and proposed that AirZim reconfigures the route to include Johannesburg.

But the AirZim board, then led by Ozias Bvute, was supposed to agree to conditions proposed by van Hoogstraten, which included the formation of a new company in London, fully controlled by the British businessman that would manage the flights. The transaction was turned down.- FinGaz

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