Air Zimbabwe fails to realise profit

Published: 24 October 2013

Air Zimbabwe has not made a profit since it resumed operations in February after indefinitely suspending flights last year, the board has revealed.

Speaking during a briefing with the board and management before Transport and Infrastructural Development Minister Dr Obert Mpofu's tour at Air Zimbabwe yesterday, acting chief executive Mr Edmund Makona said the organisation was running losses.

In response Minister Mpofu said it was unacceptable for the board to fail to realise a profit as some of their fleet remained parked and ordered them to diversify and service more regional routes to boost revenue.

The national airline, which has been beset by challenges that have seen it operating at a $300 000 loss per annum against a possible profit of $600 000, has embarked on a drive to restore its viability and regain its lost market over the past years.

Minister Mpofu said there was no need for the airline to keep its fleet idle yet there were routes that needed servicing.

"Technically our aircraft are under-utilised. You can only increase capacity if you have more routes, so let us get all the aircraft to fly. Aircraft should be flying not kept on the ground. If you have the equipment, then do it and we will regularise it," he said.

Minister Mpofu said the airline industry relies on volumes and Air Zimbabwe could only achieve this through taking up new routes.

Minister Mpofu said the airline has the necessary expertise to return to its old glory but needed to resolve the human resources issue at hand.

Air Zimbabwe earlier this year began a retrenchment exercise that saw 600 workers being sent home.

The airline has cited its huge workforce as one of the reasons for their high production costs. The workforce consists of air crew, ground staff, handling operations, engineering and pilots.

"Personally, I do not believe in retrenchments but we have more people than aircraft. So, the retrenchment exercise has to go on. However, if we increase capacity, we might be able to recall those workers," Minister Mpofu said.

He said there were too many people in management who do not hold substantive posts. Almost everyone who attended the meeting held an acting position.

"Acting positions are a sign of omission which compromises the operations of an organisation. If you are acting, you cannot make substantive decisions."

"I am a substantive minister and I want to deal with substantive issues run by substantive managers together with a substantive board," Minister Mpofu said.

He praised Air Zimbabwe for its just-ended promotion that is expected to restore market confidence and perception management but urged them not to over-promote as that would also create losses.

Speaking during the same occasion, Air Zimbabwe acting chief executive Mr Edmund Makona said although the airline had managed to increase its market share, it was still battling to break even.

"Although we have increased capacity through the just ended promotion, we are still battling with low yields because every flight taking off is not making any profit."

"We are working on an efficient route management system and we also have to keep up with international aviation standards," he said.

The national carrier is struggling with debts of over $140 million. Of this, $30 million is owed to international creditors.

The management said they have drafted a proposal mapping the way forward which would soon be submitted to the ministry for approval.
- herald

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