Airports Company South Africa (ACSA) – the firm charged with managing the country’s state-run airports – on Monday said it has lifted the ban on Zimbabwe’s national airline to fly into Johannesburg.
A week ago, Zimbabwe’s flag carrier was barred from using SA’s airports over its failure to pay for airport services. It owed payments such as landing and parking fees, passenger service charges and an undisclosed amount towards clearing its arrears.
The Zimbabwean carrier is required to pay the company once a week to cover the charges for a weekly flight into Johannesburg.
“Air Zimbabwe has not adhered to the cash basis terms for using airports owned by Airports Company South Africa,” ACSA said at the time. “The prohibition will remain in place until outstanding amounts are settled.”
The embargo saw the airline’s Boeing 767-200 jet – its only operational plane – impounded from leaving the Oliver Tambo International Airport in Johannesburg. But the issue was resolved on Friday when Air Zimbabwe settled its debt, ACSA said.
“Air Zimbabwe was…able to re-commence operations from (Johannesburg’s) O. R. Tambo International Airport from Friday 25 October,” a spokesperson for ACSA told AFP.
Without giving any detail on the amount of money involved, the official added that the company acknowledged “a receipt of payment towards the amounts outstanding.”
For his part, Air Zimbabwe spokesman Tafadzwa Mazonde told Reuters that negotiations were held and the airline was given “clearance to take off and land on Friday.” But he declined to say whether the carrier had cleared its debt or come to another arrangement, such as part payment.
Inconsistency and financial difficulties
From its hub at Harare International Airport, Air Zimbabwe used to operate a network within southern Africa, including Asia and London-Gatwick. But financial difficulties forced the carrier to cease operations in February 2012.
Serving a reduced domestic network, the carrier resumed operations for a short period between May and early July 2012, when flights were again discontinued. Some flights were restarted on a discontinuous basis in November that year.
Then in April 2013, the airline resumed operating some domestic routes as well as the regional service to Johannesburg.
Air Zimbabwe may have been able to come to an agreement with South Africa and resume flights to Johannesburg – currently its only international destination – but more financial problems lie ahead for the debt-strapped airline.
Reports show that the airline owes foreign and domestic creditors over $300 million, which analysts doubt it may be able to settle anytime soon. This is particularly because of the ongoing economic downturn and hyperinflation in Zimbabwe where basic items such as food, fuel, and medicines are scarce.
Similar to other struggling African carriers such as South African, Kenya and Sudan Airways, the government has resorted to cost-cutting to save Air Zimbabwe. Over the past two years, it has laid off hundreds of staff.
Air Zimbabwe’s troubles are, however, unique in that they were triggered by the economic meltdown that has affected virtually every organization – both private and public-owned – in the southern African country.
There is a gloomy outlook for Zimbabwe’s economy as it remains on the United States sanctions list, making it difficult to renegotiate debt owed to international lenders or request for new loans.
Considering this, the much-needed financing to revive the ailing state carrier might not come about in due time, leaving Zimbabwe with one option – privatization.
The government has initiated the privatization process, reports say, putting the airline under administration last year after which it invited bids from potential investors. Air Zimbabwe is just one of the dozens of state-owned firms in the country which are earmarked for partial or full privatization.
Although there are no updates on the progress of the plan, it is a commendable move as it would help the government cut its fiscal deficit, experts say. Then it can channel its attention and resources solely on reviving the economy.
Moreover, for many countries, having a national airline is largely a “political decision by leaders who see successful flag carriers as a sign of status,” said John Ashbourne, Africa economist at London-based Capital Economics.
Citing Ethiopian Airlines, the only exception in a continent where almost all state carriers are either debt-ridden, making losses or depend on state treasuries for survival, the economist said that its success suggests that a few firms will find their niche.
“But Africa certainly doesn’t need 54 competing national airlines linking their various capitals to London, Paris, and Johannesburg,” Ashbourne said in an article on African Business Magazine. “Some African countries, smaller ones, for instance, may have to give up on their big dreams.”