Govt to invest US$30m in national airline

Government has entered into a partnership with the Ethiopian Airlines to reestablish the Zambia National Airline at an estimated cost of US$30 million.

In an audio statement, Transport and Communications Minister Brian Mushimba said Cabinet had already approved the reestablishment of the national airline which he said will be operational starting 2018.

“As Zambia we know that our Treasury is stretched. We don’t want to put another burden to weight. So we made sure when we did the business modeling, we did the financial analysis and all the analysis we did, we picked the best option which we presented to cabinet for the reestablishment of the national airline. We are reestablishing national airline with a strategic partner Ethiopian Airlines. And Zambian government will be the majority owner of this operation. It will be Zambian owned, it will be Zambian operated, it will be Zambian food Nshima and whatever else you want to eat,” Mushimba said.

“But we want to make sure that we go with the strategic partner, we share the risks and we make sure that we don’t burden the Treasury. And that is a decision that has been made today from here now, we finish all the agreements, we finish all the application of the permits that we need, we finish the recruitment process that we need to establish, we finish the appointment of the board so that the board can start completing recruitment of management staff and then we can start talking about equipment and defining the routes that we are going to do. We are focusing on domestic routes and regional routes to start with before we can grow to other routes such as international routes.”

He said Cabinet must be commended for making the bold decision.

“It is a very big day to us as Zambia because our flag will start flying in 2018 and Cabinet has to be commended for this bold decision, difficult decision, complex decision that they have made it and made it with the intention of the future of this country with strict instructions that it has to be operational and profitable at time X and to make sure that it is not a burden to the Treasury. The estimated budget in the first year, we are going to invest a total of US$30 million into the reestablishment of the national airline. And obviously like I mentioned that we have our strategic partner, not all of it will be on the Zambian government,” he said.

Mushimba said over time, Zambians would appreciate the national airline more.

“It is a decision that 20 years down the road, you look back and know that you made a right decision, you gave the best chance to have the national airline that will sustain itself and it met all the objectives that you had set. And because the main objective of the national airline is actually to accelerate and support economic activities, we also still went further than that because we knew that there are many countries that have set up national airlines and those national airlines are loss making but they are still funding because they understand the nominal effect that the national airline has outside just the numbers that you see by passengers and outside you will be seeing the balance and realise that we are not making money,” said Mushimba.

“Ethiopian airlines for example, when they started out, they made a decision of not going to make money for time X because we want to use the airline to grow these other industries. And for ten years, they didn’t make any money. Talk about south African Airways right now, all the financial numbers that you look at are struggling and government has to pump money in but you won’t hear South African government saying we want to shut down this airline because the value the national airline has to the economy is much more than the loss that you register as a national airline.”




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