Air Zim to cut 500 jobs to counter financial woes

By Alex Bell
18 August 2009

Hundreds of Air Zimbabwe employees are set to lose their jobs, after the airline announced on Tuesday it was forced to take drastic action to counter its financial woes.

About 500 jobs, which represent one-third of Air Zimbabwe’s 1500 strong workforce, will be cut to mitigate the airline’s significant financial losses incurred over the past several years. The airline’s chief executive said that the company had no other option but to ‘right-size’.

“If we do not do anything about it, the business will collapse. The situation we are in today as an airline and as a country is not best for business,” said Mr. Peter Chikumba.

The airline’s annual passenger numbers have dropped drastically in the last thirteen years, as a direct result of the country’s economic and political crises. In 1996, Air Zim was ferrying an estimated one million passengers to and from Zimbabwe every year, but that has dropped to just 300 000 passengers this year. The company is already battling US$30 million in debt, and has asked the cash-strapped government to sell its stake in the airline to raise desperately needed cash from possible private investors.

Flights to Dubai, Kinshasa and Luanda have already been cut from the airline’s flight register in an effort to save money, with the company focusing on its busy routes to South Africa, Britain and Zambia. But the priority flights are also at possible risk, after Chikumba expressed concern for the airline’s ageing fleet of planes.

“Our 737 fleet is 23 years old and has outlived its economic life span,” he said. “The standard economic life span of an aircraft is about 15 years. Maintenance costs are high, spares for these airplanes are scarce,” Chikumba added.