Sunday, February 9, 2014

Quick Notes On Air Zimbabwe

We all played with toy-planes as children, but the tragedy for many Africans is that our politicians continue to have this plane fetish as adults. This fetish, a deep desire to have a national airline, comes at a great cost to our societies and upends our development priorities. A mantra from the 60s states that having a national airline is one of the key markers of sovereignty. But the airline business is cruel and heartless; it's a capital-intensive business with narrow margins, that leaves many of its players gasping for breath. The once-vaunted SAA has only been kept alive in recent years by massive injections of state-subsidies; the national airlines of Nigeria and Ghana went bust in the 90s; the Belgian state carrier SABENA went bankrupt in 2001; and it too was quickly followed into oblivion by the Swiss state carrier SWISSAIR in 2002. As you can see, the business model of the aviation-industry has no space for emotional ties to dearly-held mantras, or even any notions of national strategic interest. 

The aviation business is capital intensive and merciless in its modus operandi: a single Boeing-767 costs $160M and must constantly fill 70% of its seats in order to break even (cost wise); the price of oil has been hovering at about $90/barrel for the past five years, and aviation fuel is at its highest price in a decade. The only airline companies that are prospering in this merciless environment are the airlines of the Gulf Arab States (which are backed by a bottomless pool of petro-dollars), and highly efficient flag-carriers like Singapore Airlines. 

Having stated the above, any rational mind would probably inquire as to why a desperately-poor, developing country would waste scarce resources on a national airline. With all of our pressing needs, be it in health or education, why splash $160M on a brand-spanking new Boeing 767? It just doesn't make any economic and moral sense. Not only that, but African airlines (especially) have a very shoddy reputation in the aviation business, and AirZimbabwe (even more so) has an even shoddier reputation than most. Below, I have posted a short list of some AirZimbabwe's woes in the past decade (not in chronological order).

-- It was recently reported that for two months in 2009, the airline had flown without insurance (that's akin to driving a car without any brakes). Apparently it had defaulted on payments to an insurer.

-- It was recently reported that two of AirZimbabwe's A320 Airbuses were grounded at Joburg's OR Tambo Airport due to the unserviceability of the planes.

-- the airline also has in its possession three Chinese-made MA60 planes which remain grounded due to the fact that no-one (not the Zim Govt officials, the Zim public, or even the Chinese themselves) will get into such rickety contraptions.

-- In 2010, at the height of its woes, AirZimbabwe had four planes (of which only one was operational) and yet was still (almost comically) overstaffed with 48 pilots and 268 technicians!

-- In 2005 AirZimbabwe gave new meaning to the term "flying solo" when it flew a return flight from Dubai to Harare with just a single passenger. It would then break its own dubious record in 2012 when it flew a regional route to Joburg with no passengers!

The solutions to AirZimbabwe's woes are simple. First of all we need to pitch ourselves as the cheapest business-market in the Southern African aviation-market. This we must do by slashing the cost of airport landing-fees and taxes, and reducing or (removing) any flyover fees for flying over our air-space. Then the Zim Govt must sell off a majority-stake in the airline to a "strategic-partner", i.e a well-endowed purchaser. Ideally the present AirZimbabwe would cease to exist in its present form and be re-branded as a smaller offshoot of a major airline. Ideally, the well-endowed strategic partner would inject much-needed capital into the new AirZimbabwe as well as taking over its onerous $200M debt ($160M to creditors & $40M to its staff).

All long haul flights must be ceded to the better-run airlines from the Gulf Arab states, and the better-run African airlines like Ethiopian Airlines and Kenyan Airlines. The only long-haul route that should be maintained is the popular Harare-London routeIdeally, this new AirZimbabwe  should focus on servicing regional routes (to Gaborone, Maputo, Lusaka etc) as well as flying to all the popular domestic routes (to Vic Falls, Kariba, Bulawayo etc).

The regional and domestic routes can be serviced by the much-smaller Embraer and Bombardier jets, which carry around fifty passengers and (more importantly) don't come with heavy price tags. And finally, the massive head-count at headquarters must be culled dramatically. The present AirZimbabwe is filled to the rafters with political appointees and useless dead-weights; they must be given their marching orders and shown the door!

Thank You/Ndatenda

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