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Can AirZimbabwe survive operational turbulence ?

But no industrial action at the airline has been as debilitating as the current strike which has grounded Air Zimbabwe planes for three weeks, with pilots insisting on being paid their overdue salaries.

Analysts told Standardbusiness last week that the real problems at the airline were not being addressed.

Instead, the airline was concentrating on stopgap measures.

“The real problem at the airline is that it is not generating enough revenue while the costs are increasing and there is too much political interference,” an aviation expert said.

The airline says it has no money to run the operations while pilots believe management at AirZim is top-heavy, which sees it gobbling the bulk of the revenue generated.

The sentiment at the airline is that the equipment it uses is now antiquated and expensive to maintain.

However, experts say even if the airline were to get new planes today, it would still collapse because there is no appreciation of a good business model.

“To get a new 737 plane costs around US$60 million and it has to be paid in 10 years, meaning an installment of US$500 000 per month without factoring in interest,” an expert said.

“This is unsustainable without a good business model and it will increase the airline’s debt and accelerate its demise.”

On the issue of staffing, the expert said the organisation was not overstaffed but there were structural defects which needed to be addressed to utilise the existing resources.

“In the region each pilot flies a maximum of 100 hours a month and at Air Zim, they fly around 20 to 30 hours a month and basing on their salaries, pilots in Zimbabwe are actually expensive,” the expert said.

The airline has since independence witnessed a high turnover of chief executives with government playing a role in recruitment. In some cases appointed heads had no aviation experience and failed to breathe new life into the airline. The situation has been compounded by the appointment of a board with no aviation experience.

In the current board, chaired by Jonathan Kadzura, there is no single member with experience in the airline business despite Transport minister Nicholas Goche telling stakeholders in 2009 that the situation would be addressed.

The only hope for the national carrier is that there are some African airlines that were in a worse position than Air Zim but turned the corner when their governments stopped interfering.

 

How Kenya Airways was salvaged  from the ruins of EAA

Kenya Airways, created from the ashes of the East African Airways, is one clear example of a moribund airline bouncing back to life. The East African Airways (EAC) was jointly owned by the governments of Kenya, Uganda and Tanzania but collapsed in 1977 due to ideological differences in the three countries.

Following the breakup of the EAC, the Kenyan government embarked on plans to set up its own airline which resulted in Kenya Airways (KQ) being incorporated as a wholly owned government corporation and the flag carrier of  the east African nation in January 1977.

According to a paper, entitled The Making of an African Success Story: The Privatisation of Kenya Airways, the new airline was to face problems such as little technical expertise, overstaffing since it tried to accommodate some of the staffers from its predecessor airline.

Managerial problems were to haunt the airline and from 1977 up to 1995 at least 10 chief executive officers were appointed to give the airline new wings. Therefore, each successive holder of the office had insufficient time to develop and implement effective strategies.

 

By 1991, KQ was unable to pay its debts, which had run into millions of US dollars with government continually rescuing the airline. The Kenyan government responded by setting up a committee to investigate the problems at the airline and recommend solutions. The probe committee subsequently recommended full commercialisation of the business. The committee recommended the firing of the entire board, the position paper said.

“In order to turn the company around, the new board came to the conclusion that the airline could only become a commercial success if its route and fare structure, fleet acquisition decisions, hiring and promotion practices, and financial systems were based on normal commercial principles, free from political interference,” the paper said.

A consultant was hired to work on ways to improve the fortunes of KQ. When the fortunes appeared rosy, the airline began a search for a strategic partner culminating in the selection of Royal Dutch Airlines in 1995. In January 1996, the Kenyan government sold 26% of its shareholding to KLM for US$26 million. Now the airline is a roaring commercial success story.

 

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