Zimbabwe losing millions in aviation sector

 Monday, 10 June 2013 12:31

Zimbabwe could be losing close to $100 million annually in earnings to foreign airlines following the collapse of its national carrier and the government's reluctance to license domestic airlines, a local business group has said.

Air Zimbabwe resumed domestic and regional flights a few months ago after it grounded its fleet last year fearing debtors who were threatening to seize planes in order to recover their money.

Three South African airlines — South African Airways, Comair and Airlink — control over 90 percent of the market share on the Harare-Johannesburg, Johannesburg-Victoria Falls and Johannesburg-Bulawayo routes, against AirZim's 10 percent.

A report by the Zimbabwe National Chamber of Commerce (ZNCC) titled Aviation — a Catalyst for Promoting Tourism, Industry and Commerce in Zimbabwe,  reveals that reluctance by the government to allow domestic players on lucrative routes had resulted in foreign airlines dominating these routes, depriving the country of foreign currency.

According to the report, in 2011 one million passengers used these key routes, generating over $800 million.

Air Zimbabwe generated $160 million, or 20 percent of total revenue.

Out of 23 000 tonnes of cargo shipped during the period, Zimbabwean airlines flew 500 tonnes, generating US$870 000 out of a possible US$40 million.

"As a country, Zimbabwe could be losing potential earnings of over US$8 million per month to foreign airlines," reads part of the ZNCC report.

The report said if government registered new domestic players, over 93 000 direct and indirect potential new jobs could have been created.

ZNCC said government must immediately open up the airspace.

"Zimbabwean applicants who have met all required conditions for starting airlines have found themselves unable to do so because the Ministry of Transport and Communications has not been forthcoming in granting the necessary air traffic rights," said the report.

A few domestic airlines have been licensed but they have been denied licences to fly on key domestic routes.

"Allowing other players on profitable routes such as Bulawayo and Victoria Falls (from Harare), will provide the operating airlines with financial resources (cross subsidization) to develop thin routes such as the Harare-Beitbridge daily service, Harare-Mutare three times a week, Harare-Kariba-Hwange-Victoria Falls four times a week, Harare-Chiredzi three times a week and Harare-Masvingo three times a week," the report said.

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