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Zim invests $70m in new planes


The planes were acquired by Zimbabwe Aviation Leasing Company (ZALC), a special purpose vehicle and will be leased to a government-owned entity, Zimbabwe Airways.

Officiating at the event to receive the plane, Finance and Economic Development minister Patrick Chinamasa said Treasury has so far paid $41 million, leaving a balance of $29 million.

He said the government had to go that route, as it could not continue pumping money into struggling flag carrier, Air Zimbabwe.

“We pondered over options and it became clear to me that we could not put more resources into a bottomless pit. Government put in place ZALC in October 2016. These planes will come and ZALC will lease them to third parties up to such a time when Air Zimbabwe will run the business at a sustainable business. Accordingly, the government decided to lease the plane to a new company called Zimbabwe Airways, which has been put in place,” Chinamasa said.

He said eight Embraer planes would be acquired to bring passengers from the region to Zimbabwe. He said one has already been acquired.

Chinamasa said former President Robert Mugabe’s son-in law, Simba Chikore had no shareholding directly or indirectly in the new airline, but was engaged for his expertise to assist in the negotiation for the acquisition of the planes.

Zimbabwe Airways, Chinamasa said, needed strong leadership and management.

“We don’t want the new airline to come back to us to seek subsidies. There will be more business coming to Zimbabwe. This means, in general, more revenue will come to Zimbabwe,” he said.

The minister said the project was kept under wraps, as part of a sanctions-busting measure and to avoid disruptions in negotiations.

Chinamasa said the government also engaged Boeing, which, after a due diligence, exercise recommended that the planes were good assets with a lifespan of 15 to 20 years.

The Treasury boss said the planes would be given to Air Zimbabwe once the struggling airline has developed a credible business plan to run the planes on a sustainable profitable basis.

Air Zimbabwe is struggling to stay afloat, weighed by high operational costs and failure to attract passengers.

It is saddled by a debt of over $300 million. The flag carrier has become a shadow of its former glory due to mismanagement with former Transport minister, the late Herbert Ushewokunze once describing the company as a museum of mismanagement.

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