The collapse of Air Zimbabwe coincided with the appointment of the son-in-law of the late former President Robert Mugabe, Simba Chikore, The Standard has reported.
The publication further reports that the flag carrier’s collapse was triggered by over a US$137 million loss in four successive years.
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Corporate malfeasance, incompetence, government interference and systemic corruption are some of the factors cited in a confidential document as variables that contributed significantly to Air Zimbabwe’s collapse.
The Standard further reported that Air Zimbabwe has been gradually collapsing and reached the climax when Simba Chikore was heading the airline.
The period under review is when Simba set a shadowy outfit called ZimAirways through public funds. The report prepared by the airline administrator Grant Thornton says Mugabe’s son-in-law was at the helm of both Air Zimbabwe and ZimAirways.
The yet-to-be-published report, seen by the Zimbabwe Independent this week, details how Air Zimbabwe plunged into bankruptcy and subsequently grounded operations in 2011.
The state-run airline only resumed operations in 2013, with a leaner staff complement, flying routes and a fleet of outdated aircraft, most of which had been phased out by modern airlines.
In the report prepared by Grant Thornton’s administrator, Reggie Saruchera, AirZim:
- posted a loss of US$40 106 258 in 2014 with expenses totalling US$71 500 902.
- posted a US$28 857 563 loss and incurred US$61 736 856 expenses in 2015.
- Revenue generated stood at US$32 879 293.
- posted a loss of US$22 289 335 while expenses stood at US$56 506 380 in 2016 while revenue stood at US$34 217 046.
- From 2017 to 2018, posted losses of US$33 110 078 and US$14 287 913, respectively.
- In 2017, expenses stood at US$62 243 488 and dropped by almost 50% in 2018 at US$31 383 917.
- The airline was placed under reconstruction in 2018.
Grant Thornton, summarising the depressing financial affairs of AirZim, noted that:
_Historical unaudited financial statements for the four-year period ending 31 December 2017, shows that the airline recorded persistent losses characterised by a decline in revenue._
_Air Zimbabwe’s operating aircraft reduced from a peak of seven in 2009 to two in 2018. In addition, the equipment in use is over 25-years old resulting in high operating costs. The airline is operating in an environment where it is earning most of its revenue in local RTGS. We note however that most of the airline’s costs are denominated in foreign currency._
When the document was prepared on November 28, 2018, AirZim’s liabilities ballooned to US$380 million with an asset portfolio worth US$127 million.
Cumulative debt rose to US$370 million, with US$30 million constituted by foreign liabilities.
The document was submitted to the late Transport minister Joel Biggie Matiza, Justice minister Ziyambi Ziyambi and AirZim’s creditors.
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