Air Zimbabwe (Private) Limited

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Company Perspectives
As a passenger and cargo carrier, the national airline plays a crucial role in the development of tourism and freight industries within Zimbabwe, the region and international markets.
Key Dates
1946: Central African Airways (CAA) is formed.
1953: CAA launches service to London, with three overnight stops along the way.
1967: Air Rhodesia Corporation is created as CAA splits.
1980: Service to London is launched; airline is renamed Air Zimbabwe.
2004: Routes to Dubai and China are added as Zimbabwe government expands ties with the East.
2007: Air Zimbabwe increases cooperation with regional neighbors.

Type: Private Company
Address: P.O. Box AP1, Harare Airport, Harare, Zimbabwe
Telephone: (263 4) 575111
Fax: (263 4) 575068
Web: http://www.airzimbabwe.aero
Employees: 1,300
Sales: ZWD 76 billion ($19 million) (2004)
Incorporated: 1967 as Air Rhodesia Corporation
NAIC: 481111 Scheduled Passenger Air Transportation; 481112 Scheduled Freight Air Transportation; 481211 Nonscheduled Chartered Passenger Air Transportation; 488119 Other Airport Operations; 488190 Other Support Activities for Air Transportation
SIC: 4512 Air Transportation - Scheduled; 4522 Air Transportation - Nonscheduled; 4581 Airports, Flying Fields & Services

Air Zimbabwe (Private) Limited runs a unique airline. Though relatively small, it has come great distances, managing to field a few long haul international routes in addition to regional and domestic service, in the face of considerable political instability and economic challenges. Air Zimbabwe has significant cargo, cargo handling, and charter operations. It also has a maintenance base and training center. Air Zimbabwe reportedly flew fewer than 70,000 passengers in 2006, a fraction of the 400,000 it counted per year in the early 1980s, but was attempting to grow regionally and internationally through partnerships with other airlines.

Origins

Air Zimbabwe traces its history back to the formation of Central African Airways (CAA) in 1946, but this was itself preceded by a small aviation industry that had plied the region's skies since 1931. Using the de Havilland biplanes of the day, Rhodesian Aviation Company (RAC) began flying a couple of routes connecting the capital of Salisbury, later called Harare, to Bulawayo in the western part of Rhodesia. Johannesburg, South Africa, was later added to the line. RAC folded within a couple of years, but was reborn as an affiliate of Imperial Airways called Rhodesian and Nyasaland Airways (RANA).

Southern Rhodesia bought RANA in February 1940, making it part of the country's air force. These operations, dubbed Southern Rhodesian Air Services, were incorporated into CAA when it was formed by government decree in June 1946. The fleet was promptly updated with a mixed group of British-made aircraft. The route network grew, by 1953 even stretching to London, a marathon intercontinental crossing requiring three overnight stops. BOAC took over such long-haul routes within a few years, however.

Southern Rhodesia was the largest partner in CAA, with a half interest. Northern Rhodesia had a 35 percent holding while Nyasaland, later called Malawi, owned the remainder. When Northern Rhodesia, later Zambia, left the partnership in 1967, its southern neighbor carried on with the new Air Rhodesia Corporation. The airline was profitable at the beginning in spite of the turmoil in the region.

CAA entered the jet age in 1959 with the addition of Comet 4 aircraft leased from BOAC on a part-time basis. Although a half-dozen Viscount turboprops had been acquired, CAA held on to its World War II vintage DC-3s for another couple of decades. Boeing 707 jets joined the fleet in the 1970s. During the 1980s the fleet shifted to a pair of long-range Boeing 767s and midsize Boeing 737s. A smaller, British Aerospace BAe 146 was also operated for a while.

After Independence

Fighting ravaged the country before its independence from Britain in 1980. During the war, guerrillas targeted civil aviation, downing one of Air Rhodesia's Viscounts with a heat-seeking missile. The piston-engine DC-3s were deemed less vulnerable to such attacks, and placed into service on one particularly risky route.

The airline's name had changed to reflect the political situation on the ground. It became Air Zimbabwe Rhodesia in 1979, then simply Air Zimbabwe in early 1980. Advertising of the day described the carrier as "fast and friendly."

Air Zimbabwe had been chiefly a domestic airline before independence, although it did fly to a couple of destinations in neighboring South Africa (Johannesburg and Durban). A twice-weekly service to London's Gatwick Airport was added in April 1980; airlines were used as the international calling card of many an emerging nation.

The London service was unique in that it was direct, without the customary stops at major hubs along the way. Even nonstop, the Harare-London flight took more than ten hours when introduced. Two more weekly flights to London, one with a stopover in Frankfurt, were added later. The European routes became an important passageway for Zimbabwe's exported cargo, such as flowers and produce.

According to London's Financial Times, Air Zimbabwe carried about 400,000 passengers in 1981, a 10 percent rise from the previous year. Although it was still small compared to other international airlines, it was relatively self-sufficient. The carrier had a maintenance operation dating back to CAA days. It was handling increasingly complex engineering work, as well as providing services and training for neighboring airlines.

The Challenge of Liberalization

Air Zimbabwe was faced with increasing competition in the 1990s as its country allowed many new entrants into its skies. Rivals included Europe's major airlines such as British Airways and Lufthansa as well as regional airlines including Kenya Airways and Zambia Airways. At the same time, there was pressure to reduce government subsidies in place since the late 1970s. There was also the matter of the 99:1 debt to equity ratio, noted Airline Business. The company was beginning to show intermittent profits. Sales were roughly ZWD 500 million in the 1991 fiscal year, when the company had more than 1,800 employees.

The airline aimed to retain passengers in the newly competitive environment through better customer service and an improved product. It upgraded its business class offering while eliminating the first-class section on the Boeing 767s. It also invested in a computerized reservations system, Air Zimbabwe Reservation System (ZEBRA), in 1993.

Increasing feeder traffic into Harare was an important objective. Air Zimbabwe boosted its regional services but remained aloof from global airline alliances. It did operate a couple of long haul routes in cooperation with other carriers, however, including a joint service to Australia with Qantas by 1991 (the aircraft was a Qantas Boeing 747). Routes to Beijing and Singapore were added later. Air Zimbabwe also teamed up with airlines in neighboring states on a couple of regional services.

According to Airline Business, the international flights to London and Johannesburg were the most profitable. As with many state-owned airlines, some of the domestic routes were operated at a loss for political reasons.

Media Relations Under Mugabe

The airline and the Zimbabwean government have not had the most harmonious relationship with the press. In one bizarre incident, in 1999, the Chicago Tribune retold a silly story about an Air Zimbabwe pilot allegedly being locked out of the cabin. It was soon revealed that the writer had simply inserted an old urban legend into a review of her travels. The newspaper issued a retraction and apology, but that did not stop the tale from resurfacing in the unregulated gossip mill of cyberspace.

A couple of years after this incident, Zimbabwe banned foreign journalists altogether, while threatening jail time for local reporters caught criticizing the government. Robert Mugabe, the country's longstanding president since independence, had become a pariah in the west over civil rights concerns, and his liberal use of Air Zimbabwe aircraft was seized upon as a symbol of excess by newspapers in Europe, North America, and South Africa.

Looking East

New routes were added to Dubai and Beijing in 2004, reflecting the increasing economic relations between Asia, the Middle East, and Africa. The next year, the company imported a pair of MA60 turboprop aircraft from China to operate on regional routes.

Total revenues for 2004 were ZWD 76 billion ($19 million), according to the Zimbabwe Standard (via Africa News Service). Although up threefold from the previous year, the airline was struggling, cutting more than a dozen routes due to dwindling traffic and resources. Problems continued; there were flight cancellations in 2005 and 2006 due to fuel shortages and the threat of aircraft repossession by creditors. A portion of the fleet was said to be inoperable.

According to the Zimbabwe Independent figures relayed via Africa News Service, the airline carried fewer than 70,000 passengers in 2006. The airline was said to have broken even in 2006. Its debt was reportedly ZWD 50 million ($12 million). The company was restructured during the year into five strategic business units: the Air Zimbabwe Passenger Company, National Distribution Services (Galileo Zimbabwe), National Handling Services, Air Zimbabwe Technical, and Air Zimbabwe Cargo.

There were a number of chief executives during the Mugabe years. One of the longer lasting ones was Rambai Chingwena, who led the airline in a variety of on-again, off-again roles beginning in 1999. A lawyer by training, he had been general counsel for Air Zimbabwe for a couple of years before being named managing director.

Chingwena resigned in 2004. Three years later, Air Zimbabwe settled upon a new leader in Dr. Peter Chikumba, the controversial former CEO of Ethiopian Airlines and Air Namibia. A key challenge before him was updating the aging fleet.

Other enduring difficulties included raising adequate hard currency to meet operating expenses. Air Zimbabwe was attempting to earn more foreign currency by increased cooperation with neighboring airlines. Air Malawi and Zambia Skyways joined Air Zimbabwe in operating routes to London and Dubai. At least one observer compared this arrangement to the old Central African Airways from which these carriers were descended.

Principal Subsidiaries

Air Zimbabwe Ltd.; Air Zimbabwe Cargo; Air Zimbabwe Technical; National Handling Services (Pvt) Ltd.; National Distribution Company (Galileo Zimbabwe).

Principal Divisions

Technical Services; National Handling Services.

Principal Competitors

South Africa Airways (Proprietary) Limited; Kenya Airways Limited; British Airways plc; Air Mauritius Ltd.