Sunday, 2 September 2018

WHY AIRZIM IS STRUGGLING : FORMER BOSS


Government has been accused of neglecting Air Zimbabwe resulting in a high employee turnover rate coupled with a high skills development cost at the airline, a report has revealed.

According to an exit report from the former board chairperson Chipo Dyanda on the state of Air Zimbabwe, morale was low among staff while government dilly-dallied with a legacy debt and recapitalisation plan.

“Workers generally feel job insecurity due to lack of a transparent communication system with them on the direction of the company and its relationship with Zimbabwe Airways and Zimbabwe Aviation Leasing Company. Therefore, they are always on the job hunt because of that insecurity,” Dyanda wrote in her 12-page exit report.

Outgoing Transport minister Joram Gumbo dissolved the Air Zimbabwe board recently in preparation for placing the parastatal on a reconstruction order through an administrator.

The airline has been struggling to remain afloat due to a legacy debt amounting to $341 million and what the former board chairperson termed lack of support from the shareholder.

Dyanda said the decision to place the airline under an administrator could be misplaced and was done in haste without taking due care since Air Zimbabwe had the potential to “flourish” if government followed through a recapitalisation plan set out by management and her team.

“The strategic turnaround plan indicates that it requires $189 million over three years and not all at once. The important capital is the short-term $44 million to operationalise the new business model since it intends to reopen international destinations,” she wrote.

Dyanda listed what her team achieved throughout its tenure (2016-2018), among which was the reduction of the workforce from 500 to 232 and the retrenchment of all under-qualified or unqualified staff.

“The low salaries of pilots continue to be a source of staff flight to greener pastures. Air Zimbabwe operates in a competitive international environment and localised salaries continue to drain out the staff after the airline has invested heavily in their training,” Dyanda said.

“Air Zimbabwe has become a training ground for other airlines locally and internationally, yet the training weighs heavily financially on the airline. In addition, expecting Air Zimbabwe to be efficient and competitive in the international space is unrealistic considering its old fleet. The airline needs to be re-equipped.”

She doubted the authenticity of the $341 million debt saying an audit needed to be carried out as it was “wrongly bundled” together with a legacy debt and inflated figures.

“A true picture of the nature of the debt is that of the $341 million, 92,32% of it was local debt while only $26,182 (about 7,68%) is foreign debt, and 77% of the local debt is inter-parastatal and government through the ministry of Transport and Infrastructural development,” Dyanda said.

Government last year established a separate airline, Zimbabwe Airways, whose set-up was being spearheaded by Simba Chikore, a former chief operating officer at Air Zimbabwe and former President Robert Mugabe’s son-in-law.

The decision, according to Gumbo, was aimed at evading Air Zimbabwe debts while at the same time it was an attempt to keep the country represented in the skies.

The new airline is yet to fly as it has not yet got its paperwork in order. Dyanda said government had let down Air Zimbabwe in its bid for recapitalisation.

“The airline (Air Zimbabwe) was to be funded in two ways; either shareholder recapitalises the airline from the fiscus or attracts strategic partners. No funding was received from the fiscus, but instead, a new airline was funded. Strategic partnerships that were received did not receive attention either nor did the airline receive feedback from the shareholder. This is a major obstacle to the implementation of the strategic turnaround plan,” Dyanda said.

The former board chair stated that among the key efforts made to revive the airline included proposals that required scrutiny and implementation by government.

“The airline attracted viable proposals that required further scrutiny and engagement. Some proposals included cash injection while others wanted to bring equipment. One more wanted a marketing relationship in Europe. These were forwarded to the ministry in 2017 and 2018,” Dyanda said.

Responding to these assertions, minister Gumbo told The Standard that although he had not seen Dyanda’s exit report, issues that she raised were not new.

“I share and appreciate the issues they are raising. Critically we have to understand that Air Zimbabwe has had challenges piling up for a long period of time,” Gumbo said.

“All the issues you are saying, as the ministry we have raised them before. It is just that government does not have money to put in and we also realised that Air Zimbabwe was fast turning into a bottomless pit. I have explained the reason behind the establishment of Zimbabwe Airways, an idea I believe we should support as a country.”

He said there was need to change the work culture and attitude towards public enterprises.

“We need to adopt a profit-making mentality and not view these public institutions as social clubs. We must all work for profitability and increase productivity,” Gumbo said.

“I appreciate the efforts Dyanda and her team put in seeing that Air Zimbabwe remained in the skies, but let us agree, its books are in a sorry state. We need to work on that so that when we go to investors, we are not exposed to manipulation.”

“I am still waiting for government to take over their debts and I supported their plan with the hope that the legacy debt would be the assumed by government,” Gumbo said.

“But as you know, the operations of government are guided by the law. We are still waiting for that to happen. I have high respect for the board and they did a great job. I don’t think it would be prudent to blame the minister. Some of these things we have to follow government processes.” Standard

0 comments:

Post a Comment