LonZim Country Manager Geoff Goss told a group of investors attending an investment conference in Harare on Tuesday the company is expecting to have an operating licence from the Zimbabwean authorities by mid-October. “Flights are scheduled to start from late this year. We are hoping that the airline will deliver affordable air links to key domestic and regional cities from Harare and will be an integral part of the Fly540 network that will be flying in nine African Countries by the end of this year,” said Goss advising other investors to get into the country and “invest now”.
LonZim is London Stock Exchange listed company and is a subsidiary of the LonRho Plc which owns the Fly540 airline and has been operating in Africa to international standards. Lonrho Plc also owns 24.53% of the issued share capital of Lonzim Plc “The launch of Fly540 Zimbabwe is central to LonZim’s investment strategy of identifying current market opportunities in Zimbabwe and establishing companies that will benefit from the economic recovery of the country. You don’t have to wait for the Government of National Unity to resolve their outstanding issues before you can invest. The time is now,” said Goss.
He said the potential aviation market on a domestic and regional basis is significant and currently underserved. “For Zimbabwe to rebuild its economic base and attract investment it is essential that it has a first world transport capability. Having observed the market opportunity for over a year, Fly540 Zimbabwe believes that now is the right time to commence operations. The 2010 FIFA World Cup soccer finals in South Africa is a bonus to the airline,” added Goss.
LonZim Air, a wholly owned subsidiary of LonZim plc, has invested US$ 200,000 in the acquisition of 90% of Zimbabwe company Sol Air (private) Limited. A further US$ 4.3 million (resulting from an independent valuation) will be invested in acquiring an ATR 42 turbo prop from the Lonrho Aviation fleet, and US$ 2.0 million for the operational costs associated with commencing operations and a working capital provision of US$ 3.9 million for the first twelve months.
This capability will be complemented by a freight service. Fly540 Africa will receive US$ 100k to initiate flight operations in Zimbabwe, and thereafter a license fee of 2.5% of gross turnover and a monthly management fee of US$ 35,000 for managerial services.
Fly540 Zimbabwe will operate the ‘low cost’ airline from Harare International Airport and is scheduled to open flights to Bulawayo and Victoria Falls on a domestic basis and Lubumbashi, Lilongwe, Lusaka, and Beira on an international basis.