Government should subsidise Air Zimbabwe – Mzembi [!?]

via Government should subsidise Air Zimbabwe – Mzembi | The Source May 29, 2014

Government should subsidise its troubled airline, Air Zimbabwe if it is to operate viably, tourism minister Walter Mzembi has said.

The airline has had to turn to government on several occasions for bailouts, and in February said it required an emergency capital injection of $50 million. But hit by budgetary constraints, government has said the airline must survive own its own.

Tourism and Hospitality Industry Minister Walter Mzembi told Parliament during a question and answer session on Wednesday that a profitable and efficient airline would be a boon for Zimbabwe’s booming tourism sector.

“I have not experienced a national airline in Africa that is viable unless it is subsidised by government,” Mzembi said.

He said it was necessary for government to come up with a model that would support the airline’s viability.

“At best we should say Air Zimbabwe shall operate at a break-even level,” he said.

“To say we can come up tomorrow with an airline that is viable is almost untenable.”

The national airline is one of the state-owned companies that have been targeted for privatisation.

But analysts say Air Zimbabwe must be recapitalised first as a debt overhang of over $110 million makes it unattractive for investors.

The airline, which has an ageing fleet of planes, recently advertised a tender to lease two Embraer jets to service local and regional destinations.