“Our cost of operating the business sits at about $6 to $7,5 million,” Innocent Mavhunga told Parliament’s Portfolio Committee on State Enterprises and Parastatals.
“Our income is between $2,5 and $3,5 million.” Mavhunga told the committee that the airline was saddled with a $137,7 million debt, of which $112,7 is owed to local creditors.
He urged government as the shareholder to inherit this debt and pump $40million capital into the airline to recapitalise it.
The chairman of the portfolio committee, Zvishavane-Runde legislator Larry Mavhima, asked what the airline was doing about the appalling situation at the airline, which last month made a flight with only one passenger from Victoria Falls.
The company wanted to cut staff but it did not have money to bankroll the retrenchment packages. It had cut routes and aircraft numbers were dwindling. Of eight remaining planes only five were functioning. All attempts to return to profitability were stymied by lack of finance.
"Management is very clear it has got to operate on commercial basis but if you can't make commercial decisions then it means obviously the challenge lies not with management," Mavhunga said.
"Successive leadership management has come up with good strategic turnaround blue prints but when it comes to implementation, management has not been given the support.
"For instance the issue of retrenchment is not because of management nor the board but the shareholder."
Reflecting on the company's failure, Mavhunga said the airline was "deeply apologetic" for the situation that shareholders, creditors and customers now found themselves in.
He said rolling industrial action by pilots, the high cost of flying the airline's ageing fleet, loss of passenger confidence in the embattled airline and lack of support from government was combining to make a deadly mix that could ground the airline.Post published in: Business