Tuesday, May 31, 2011

Air Zimnbabwe

Zimbabwe – GOVERNMENT no longer has capacity to run Air Zimbabwe alone and urgently needs an equity partner to salvage the national flag airline, analysts and aviation experts have said.

The experts and analysts also say besides an equity partner, there was an urgent need to appoint a business strategist as chief executive to usher in a new business model, de-politicise its workforce from its current combative and confrontational approach and turn it into a team of professionals that take instructions from management.

This, the analysts said, includes pilots, who have of late, tended to “talk too much outside professional parameters.”

Aviation and tourism expert Mr Karikoga Kaseke said with a strategist as chief executive and a new business model in place, the airline needed three years to turn around.

“Get me right, I don’t want to be chief executive of Air Zimbabwe because I have my own airline, Royal Zimbabwe Airline Holdings, which takes off, God willing, by the end of this year. “At the moment, Government has no capacity to run Air Zimbabwe alone, it needs an equity partner. The equity partner will probably provide money for retrenchment, because I don’t see us raising the needed amount yet the workforce is too big.

“Every expert in aviation will tell you that Air Zimbabwe needs a new business model, a new chief executive who is a strategist and who should seriously de-politicise the workers and put them in their right position.

“From experience, every chief executive at Air Zimbabwe retrenched workers or tried to retrench workers except for (Dr) Tendai Mahachi.

“(Dr) Peter Chikumba was right in trying to retrench because the worker-plane ratio there is too much. Air Zimbabwe does not need to downsize but to right-size. Chikumba was right, he was right-sizing.

“At the moment Air Zimbabwe has no business model, do you know it yourself? I don’t know it. They need a business model that is compatible with modern trends and sustainable and it is such a model that will direct operations. Ask them what is directing their operations right now?” said Mr Kaseke.

Asked to expand on the business model, Mr Kaseke said it was abnormal for everyone to afford an air ticket at Air Zimbabwe. “There should be a business model which defines operations, pricing regime, salaries, flight routes, profit margins and so on.

“Flying should be expensive . . . it is not for every Jack and Jill. It is for the filthy rich. Why should we subsidise the rich? Airlines are a means of transport not for everyone but for the rich. “Air Zimbabwe has killed itself by refusing competition. We allow even our own children to compete with other children, if you don’t allow them to compete what happens? They fail,’’ he said.

“Air Zimbabwe needs a strategist probably from the service industry, I did not say from the military but from airline, tourism and hospitality industry that is the service industry. “It will take that strategist three years or so to turnaround the fortunes.’’

Asked on the type of planes Air Zimbabwe should require, Mr Kaseke said the business model should determine that. “That is for the business model but if I were to advise them, they don’t need the (Airbus) A340 being talked about, because it is too big for them.

“I would prefer they start with Boeing 767-300 or 400. A340 is too big and costly as it carries more than 300 passengers, the 767-300 will carry around 230 passengers depending with configuration. You must know that growth will not be rapid, it will be steady, so they should later graduate into triple sevens, later,’’ said Mr Kaseke.

Mr Moses Mutengweni, a student at Singapore Aviation College, said it was clear that Air Zimbabwe was a victim of sanctions and other problems and that it could still be turned around.

“A new business model is unavoidable at this stage and I agree with Mr Kaseke that the only way out is doing things differently.

“It is for the Government to accept that it has no resources to revamp air Zimbabwe alone because Government has too many things to sort out in trying to make things work under sanctions for everyone.

“Air Zimbabwe is strategic for Government and it must not be let go, but should be remodeled together with a business partner, probably along the lines of the indigenization model of 51-49 percent.

“It must function like business and everyone must pay. I am glad that President Mugabe pays for all his trips but there are some Government officials and members of Parliament who don’t want to pay. “Air Zimbabwe must be run on profit lines. Government must make payments on time, any delays affect business. Competition is healthy and so is a new thinking,’’ said Mr Mutengweni.

Another Aviation analyst, who declined to be named, said the airline should have changed its business model long back.

“The situation has become untenable and the workers have become the masters there, Government departments do not pay on time, others don’t want to pay at all. Get me right, this is the inclusive Government and not one part of Government.

“Their spouses want to travel for free and yet this is an airline that should be run like a business. Here and there, people get free ticket but not always.

“If President Mugabe pays upfront why can’t others do the same? During their strike, pilots agreed to fly President Mugabe because they all know that he pays upfront.”

Other observers said without financial discipline at the airline, turnaround was difficult to achieve. The observer who declined to be named for professional reasons argued that the salary structures at the company also contributed towards the company’s inevitable demise.

Government has indicated that it had no money to bail out the troubled national airline although once in a while it released money to rescue the company. When the workers first went on strike last year, the official records revealed the following as the salaries some of the workers were earning.

While the lowest paid worker at the airline last year earned a basic salary of US$255, housing US$110 and fuel allowance of US$45, the chief executive officer earned US$3.500 per month, housing of US$110, fuel of US$420 and cellphone allowance of US$88.

As for the pilots and engineers, their salaries were as follows: A captain earned US$567 per month, monthly retention allowance of US$11 258.80, housing allowance of US$110, while first officer (also pilot) earned US$541 per month, retention allowance of US$5 942.14 and housing allowance of US$110.

The highest paid engineer at the airline got US$619, retention allowance of US$3 831.12 and housing allowance of US$110. The pilots and engineers also received a maximum school fees allowance of US$3 000 per term.

The official records indicate that as of August 31 2010, Air Zimbabwe owed 184 engineers about US$5.3 million, 44 pilots US$4.4 million, its 33 managers US$1.1 million, 729 active employees US$1.6 million and 343 employees on retrenchment list US$1.2 million before taxation.

However, these figures have ballooned because the company has also been failing to clear the salary backlog, while some of the workers’ allowances are reported to have been increased.

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