Air Zimbabwe faces an uncertain future after Hainan Airlines decided not to invest in the airline, as negotiations broke down.
Zimbabwe’s official news agency ZIANA reports unofficial sources saying that Hainan Airlines withdrew its proposal due to Air Zimbabwe’s US$140 million debt. Another factor was the failure to agree on a management structure and Air Zimbabwe’s reluctance to grant Hainan a 65% stake rather than 45% as proposed. Hainan Airlines is China’s largest private carrier.
Talks between Zimbabwe and Hainan were first reported in November last year when President Robert Mugabe met Hainan chairman Chen Wenli in Beijing.
Air Zimbabwe is facing the prospect of liquidation after being placed under judicial management following its rising debt level. Last month Zimbabwe’s High Court appointed a judicial manager for the struggling airline and barred the Air Zimbabwe board from any involvement with the company. The move came after unpaid employees sought an intervention from the courts.
A lawyer representing the Air Zimbabwe workers, Caleb Mucheche, said the airline had failed to pay workers since January 2009 and had accumulated arrears of up to US$35 million by the end of December.
Air Zimbabwe has had two of its aircraft seized over unpaid debts. On December 12, 2011, an Air Zimbabwe Boeing 767-200 was impounded at Gatwick Airport after American General Suppliers received a court order for US $1.2 million the airline owed for spare parts. The aircraft was only released on December 20 once the debt had been settled, but due to technical problems and a lack of spares the Boeing only left for Zimbabwe on December 24, arriving the following morning.
On December 2, Bid Air Services seized air Zimbabwe’s Boeing 737-500 over US$500 000 of unpaid debt. The aircraft was impounded shortly after landing at Johannesburg’s OR Tambo International Airport, as Bid Air parked a vehicle behind the aircraft to ensure it could not leave. Bid Air later allowed the aircraft to return to Zimbabwe.
In mid-December airline acting CEO Innocent Mavhunga said that Air Zimbabwe had suspended flights to South Africa over fears that its aircraft could be seized again, but said that flights were continuing to Zambia and the Democratic Republic of the Congo. Flights were later halted to the United Kingdom as well.
Other airlines are taking advantage of Air Zimbabwe’s collapse. Emirates this week began flying between Harare, Lusaka and Dubai several times a week while Air Namibia, which stopped flying to Zimbabwe 13 years ago, will resume services to the country in May.
An Emirates A330-200 touched down at Harare International Airport yesterday. The airline is flying the Dubai-Lusaka-Harare route every Monday, Tuesday, Wednesday, Friday and Sunday. Emirates currently serves 19 passenger and cargo destinations across the African continent.
Tourism and Hospitality Industry Minister Waltzer Mzembi said Emirates flights into Zimbabwe will increase the country’s tourism prospects and boost growth. “Two and half million tourists travelled into the country last year and we are projecting a growth of five million visitors into Zimbabwe, generating US$5 billion and contributing 15 percent of the GDP by 2015,” he said.
Air Namibia’s head of corporate communications, Paul Homateni Nakawa said that Air Namibia would be flying four flights per week, between Windhoek and Harare “and we anticipate commencing sometime mid-May 2012”. He added that they were looking at using a 37 to a 100-seater aircraft.
Statistics contained in a 2009 report entitled Tourism Trends and Statistics, produced by the Zimbabwe Tourism Authority, indicate that five of the major airlines serving Zimbabwe (Air Zimbabwe, South African Airways, British Airways/Comair, Air Namibia and South African Airlink) take up 93% of the airline market share in the country. The three South African operators take up 87% of the market.