eBusiness Weekly
Nelson Gahadza
Zimbabwe remains a key and strategic market for South African Airways (SAA) and the airliner is working frantically to restore flight frequency to previous levels as it integrates a new business model following the coming on board of a new partner last year.
The South African government in 2021 reached an agreement with a private firm, Takatso Consortium that would own 51 percent of the struggling airline, while the government would own 49 percent.
SAA chief commercial officer, Simon Newton-Smith, at a breakfast meeting in Harare yesterday, said the airline is restarting in the midst of Covid-19 pandemic but business is slowly returning to normalcy.
“We launched the Harare service in September 2021 and it was one of our first early decisions for Zimbabwe with a single daily service compared to the past where we would do four daily flights.
“We are starting an airline in the midst of Covid-19, we need to be cautious on our schedule, which has been good so far. So we are hoping the market will increase demand which will reflect on our flight schedules,” he said.
He said the Airliner is restarting the business, re-establishing business partnerships and routes, but will go with what makes sense to avoid and minimise losses.
Newton-Smith said previously, the airliner has kept an eye on international traffic flows into the region because Victoria Falls is a popular destination for Europe.
“So we are waiting for such traffic volumes so that we return to levels we have done before,” he said.
He added that the airliner has two batches of new routes starting from June and October as it begins to see opportunities.
“We are seeing opportunities, but there are some uncertainties in other markets, hence there is an opportunity to market Southern Africa as a destination. Africa presents a huge opportunity for African airlines, and part of our future is working with some establishments to explore the markets,” said Newton-Smith.
SAA has in the past indicated that it was failing to recoup the blocked funds from Zimbabwe due to foreign currency shortage issues within the economy.
Newton-Smith said the airliner is having conversations with the right people in Government. “We have US$70 million still within Zimbabwe and we will find a way to recover such funds and it is going to be a big investment on how to grow in Zimbabwe,” he said.
Meanwhile, according to the International Air Transport Association (IATA), Zimbabwe is making progress on reducing its debt owed through blocked funds from the sale of tickets, cargo space and other activities.
The country’s debt to the association amounts to US$142,7 million of the approximately US$963 million in airline funds that are being blocked from repatriation in nearly 20 countries.
Four countries that include Zimbabwe account for over 60 percent of the total debt with Bangladesh owing US$146,1 million, Lebanon US$175,5 million and Nigeria at US$143,8 million.
The Reserve Bank of Zimbabwe (RBZ), Governor Dr John Mangudya, last year said the bank is considering issuing a tradable financial instrument as part of solutions to settle outstanding foreign legacy debts.
He also noted that the central bank and the public debt management office in the Finance Ministry were finalising a Blocked Funds Bill for the settlement by Government of around US$2,8 billion foreign exchange liabilities contracted by Zimbabwean entities prior to the change of currency in February 2019, which could not be remitted due to foreign currency shortages.
Several international airlines that have been flying into Zimbabwe include Lufthansa Airlines, Emirates, Ethiopian Airlines, Kenya Airways, South African Airways, ComAir, British Airways and RwandAir.
