MINISTERS have ordered Air Zimbabwe to begin a process of finding a strategic partner after agreeing that the government will assume the airline’s £140 million debt.
Economic Planning and Investment Promotion Minister Tapiwa Mashakada says the government would give up substantial shareholding in the flag carrier in any deal.
“We need a partner urgently before the debts start to pile up again, which can be a disincentive to any investor,” Mashakada told the ZBC on Monday.
Air Zimbabwe’s greatest asset remains its routes and name recognition, and ministers hope by wiping off its huge debts, the airline will attract interest from major international airlines in Europe and Asia.
The country’s indigenisation laws limit majority shareholding to locals, but Mashakada says the government is ready to lift the legal hurdle if it would smooth a take-over. A similar waiver was exercised in the take-over of the Zimbabwe Iron and Steel Company (Ziscosteel) by India's Essar.
Zimbabwe became an aviation pariah over the last decade with several international airlines cancelling flights to the country, coinciding with a political and economic crisis only eased by the formation of a multi-party government in February 2009.
In 1999, Harare airport was crowded with the emblems of 18 foreign airlines, among them Lufthansa, Air France, British Airways, Australia’s Qantas and TAP Portugal also linking directly to Europe.
But by 2001, most of the airlines had withdrawn, leaving only a handful of airlines including South African Airways, Ethiopian Airways and Kenyan Airways.
But with several airlines set to resume flights to Zimbabwe next year, ministers know that Air Zimbabwe could be easily crowded out if it cannot compete in both capacity and aircraft.
Air Zimbabwe cancelled overseas flights over the weekend after its fuel suppliers turned off their taps over an unpaid debt. Bosses at the airline say they hope the dispute will be resolved this week to allow flights to Beijing and London to resume.