Air-Zimbabwe-767-200-ER

Can Air Zimbabwe Fly Back Into The Black Like Air Pacific?

Fiji, a former British Colony, a nation that was expelled from the Commonwealth and one that has various sanctions placed upon it, is a small island nation in the South Pacific ocean. It is ruled by what many seem to deem a dictatorial government lead by Commander of the Fijian Military Forces Frank Bainimarama. Does it’s recent history sound somewhat familiar?

A number of airlines connect Fiji to a few of it’s neighbouring island’s and countries further afield with one of the service providers being Air Pacific, the national carrier. Like a number of airlines around the world who have found the aviation industry a challenge to make a profit in, Air Pacific saw itself slip into the red. But, this year they managed to slip back into the black and recorded an operating profit of $11.5 million versus an operation loss of $2.6 million the previous financial year. This bottom line result was attributed in part to an increase in the tourist numbers.

As far as ownership goes, Air Pacific is owned by the government but now wholly! The government holds a 51% stake, Qantas 46.3% with the remaining 2.7% being held by other entities. Despite recent attempts by the government to exert greater control over the airline, it is still operating as normal.

Looking at Air Zimbabwe which is wholly owned by the government, the national carrier is in a serious state of distress and owes millions to various creditors and unpaid staff. At present, Air Zimbabwe is being threatened with losing it’s membership from The International Air Transport Association (IATA) over the renewal of its Operational Safety Audit. If this does happen, it means that the airline will not able to fly to international airports and airspace. But, this may be something that might not be a major concern seeing as they are currently only flying domestically.

If the government deems it important enough for the country to not lose it’s national carrier and provides it with the minimum it requires in order to get back into full operation what then? The way in which they have been operating over the years has obviously not been working. Privatisation is something that has been spoken about in the past but something that the government does not seem keen on. That said, could them implementing a model such as Air Pacific’s work in transforming Air Zim into a viable airline? The Fijian government is one that likes to be in control but as far as the running of their national airline goes, they are only a majority shareholder. To add to that, it’s operations are overseen by a CEO who has no political affiliations and is not influenced by politics.

Tourists numbers to Zimbabwe are reportedly on the rise which means that Air Zimbabwe will not be flying empty planes if they get back into full operation. As they continue to not fly international and try to figure out how to stay alive, other airlines are taking advantage of the huge gap they have left in the market. In recent months, South African Airways increased flight frequency into Harare and Emirates which recently started operating a 5 day/week service into Harare announced that they will soon start daily flights into the city. This goes to show that there isn’t a lack of travelers to and from Zimbabwe.

With the passage of time, regional and international carriers will continue to increase their market share and squeeze the national airline out of a space that they should be dominating. Air Zim may need to quickly learn a lesson on ownership and operation from an airline such as Air Pacific and get themselves to where they should be before it’s too late.

Is it already too late?

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One Response to Can Air Zimbabwe Fly Back Into The Black Like Air Pacific?

  1. ricky marima November 2, 2012 at 6:13 pm #

    There are issues specific to Air Zim that the writer hasn’t mentioned. Firstly, there is no indication of how much it owes, to whom and how far some of these creditors have taken their claims.
    Whilst I don’t doubt there is a business case for Air Zim, it will take a lot more than sporadic flights with 3 planes to three destinations, Bulawayo, Vic Falls and Johannesburg, from Harare to turn a profit.

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