To us, this sounds like chances are further diminishing that the airline, which is a 55/45 per cent joint-venture between the Industrial Development Corporation (IDC) and Ethiopian Airlines, will ever take to the skies. It is becoming increasingly clear that reality is slowly dawning on government that they definitely chewed more than they could swallow on this investment.
But surprisingly, government doesn’t seem to realize that this same Covid-19 catastrophe presents them with a perfect chance to cancel the Shareholders’ Agreement with Ethiopian Airlines. They seem to downplay the fact that the effects of this pandemic are so far-reaching that they render the launch of a new airline financially unviable. Airlines world-over are announcing billions of dollars in losses, but our government strangely can’t see and concede that the industry dynamics have totally changed and there is no chance for new-borns to survive.
Let’s look back at how government has pushed back the launch of this defunct dream. The national carrier was expected to launch in October, 2018, only for it to be delayed until January, 2019. When that deadline was looming, the date was pushed back to April, 2019, before they resolved to again push back to third quarter of 2019. Even that deadline was subsequently missed because the aviation dynamics have remained unfavourable. In other words, there is no clear date now as to when the airline would be launched, bigger problems have arisen.
Now, Zambians must be reminded that the IDC paid about US $30 million for the establishment of Zambia Airways. As we speak, they have employed an Ethiopian Chief Executive Officer who lives in Addis Ababa, getting a hefty salary from an airline that hasn’t even taken off in Lusaka. This Ethiopian CEO is residing in Addis, and presiding over a Zambian company, based in Lusaka, earning money in dollars. The cabin crew for Zambia Airways has already been recruited and we saw just the other month that they were returning from training in Ethiopia, meaning they, too, are getting paid salaries from an airline that has no clear road-map as to when it will even be launched. IDC must explain this, why are they spending this kind of money on loss-making ventures?
Honourable Kafwaya must not even use the Covid-19 excuse for failing to launch this airline. The reality on the ground is that the aviation sector, even before Coronavirus, was already collapsing. In August, 2017, South Africa’s Treasury was considering a 13 billion Rand (US $972 million) bailout to keep South African Airways (SAA) in the air, as it battled liquidity challenges.
In 2016, our next-door Air Zimbabwe flew with only one passenger on a flight from Johannesburg to Victoria Falls. Nigel Short (@nigelshortchess), the world chess grandmaster, took pictures of himself on the plane and even Tweeted about his experience: “I am not saying they are losing money, but I was the sole passenger on the Air Zimbabwe 737 from Jo’burg-Victoria Falls.” Fact-checkers can attest to this fact.
The Minister of Transport and Communications cannot today come and say Covid-19 has made it difficult for government to launch the airline. There was not a time when the conditions were favourable for Zambia to establish a national airline. The truth is that the challenges that face South African Airways are the same that face almost any state-owned airline in poorer countries with a more populist economic bend. Whenever governments own airlines, the temptation to step in and overrule potentially unpopular, but necessary business decisions is simply too great. Isn’t it the Minister himself who was recently saying that sometimes ET arrives in Lusaka with one or two passengers? So, why are we going ahead with the Zambia Airways plan given this clear message from the airline market? Are they going to be sharing those five passengers? It’s not prudent that we are throwing around cash in such investments.
Last year, we tried to mention that don’t borrow money to buy planes and so forth, here it is. Zambia Airways has collapsed before it even takes off and millions of dollars have been paid. If this government insists on taking corruption to the sky through the launch of Zambia Airways, it must be known that the expenditure it will gobble will have a devastating effect on other income-generating parastatals, which will be milked to keep the airline afloat. We are told that Zambia Airways will incur US $700,000 a month in aircraft leasing charges which will be paid to Ethiopian Air. What’s the guarantee that the national carrier will even make half of that?
Surely, we are at pains to appreciate why Zambia needs a national carrier when the country is struggling to keep the locomotive industry afloat. Millions of Eurobond money has been pumped into the railway business, but what is there to point at as a milestone achievement in the sector? Nothing! But we still want to introduce a national carrier so that those in senior government positions and their families can abuse it, globetrotting in business class with their families. Shame!