Business

Zambia Airways re-establishment positive for growth

KALONDE NYATI, Lusaka
A DARK cloud fell on employees of Zambia Airways and the nation as a whole when the national carrier, which created almost 2,000 jobs as well as numerous indirect jobs, was liquidated in 1994.

Several travel agencies closed, suppliers and contractors also lost business opportunities while the horticulture industry, which exported over 125,000 tonnes of cargo to the Netherlands and other European countries was also affected with the industry only exporting under 20,000 tonnes currently.

The closure of the national airline, which was the pride of Zambia, and had one of the best aircrafts in the region and assets in London, New York, Tokyo, Nairobi, Johannesburg, Dar-es-Salaam, Rome and Frankfurt, was a ‘bitter pill’ to swallow for everyone who was directly or indirectly affected.
The non-existence of a national airline has affected the tourism, commerce and trade potential of the country as it has had to rely on foreign airlines, which are expensive and are characterised by connectivity challenges.
The lack of the national airline has also hindered Zambia from benefiting from the US$1.5 billion passenger revenue per annum, which the airlines operating in Zambia are benefiting from.
Government acknowledges the opportunities the country has not benefiting from over the years and has since embarked on the re-establishment of Zambia Airways, which is expected to hit the skies within the course of this year.
The airline will be in partnership with Ethiopia Airlines, with an initial investment of US$30 million.
Under the partnership, Government will own 55 percent while Ethiopia Airlines will own 45 percent share.
The re-establishment of the national airline has cheered various stakeholders.
Civil Aviation Authority (CAA) general manager Gabriel Lesa says the ‘bouncing back’ of Zambia Airways is expected to increase air service levels, connectivity, and increased route competition resulting in lower fares.
“This will stimulate additional traffic volumes to facilitate increased tourism, trade and investment,” he said.
Mr Lesa says Zambia’s strategy to become a regional transport hub and transforming Lusaka’s Kenneth Kaunda International Airport as a regional hub will receive a boost through the national airline.
With infrastructure development underway, which has gobbled US$1 billion, it makes perfect sense to invest in an airline and ensure effective future utilisation of national assets.
Zambia Tourism Council chairman Hamoonga Ntini said the development will also spur domestic tourism.
“Domestic tourism has not fully developed due to connectivity yet we need it to sustain the sector. It is our hope that the airline will facilitate the growth of domestic tourism,” he said.
What then should Zambia do to ensure that it operates an effective and efficient airline to avoid repeating the mistakes made in the past?
Zambia Association of Chambers of Commerce and Industry (ZACCI) president Michael Nyirenda also welcomed the development but said the airline should operate profitably and ensure that government officials pay for the service.
“We should not have a repeat of the 1990s when Zambia Airways was liquidated due to, among other reasons, officials and other people getting free tickets. No one should fly for free,” he said.
Similarly, former Zambia Airways captain Maurice Chimbelu, who worked for the airline from 1971 until the time the airline went into liquidation, recounting the fateful day, says good corporate governance is necessary if the airline is to operate effectively.
“The airline should also be free from political interference .We also need to learn from young airlines like Rwanda Air, which is operating profitably and has expanded its routes,” captain Chimbelu says.
He says skilled staff will also be key in driving the airline industry.
And former aircraft maintenance engineer Isaac Muke said the airline industry is a sensitive sector that needs proper risk management analysis because any flaw can affect the profitability and result in the collapse of the airline.
Mr Muke also called for the re-captalisation of the Zambia Air Service Training Institute to ensure availability of skilled personnel.
Minister of Transport and Communication Brain Mushimba says Government will ensure that the staff is recruited, good corporate governance is upheld.
Mr Mushimba said the airline will result in the expansion and modernisation of aviation cargo handling facilities to facilitate exports of high value products thus the need to ensure that it operates effectively.
“We will get the best staff possible regardless their nationality because the ultimate goal is to run an efficient airline industry. Most importantly, no government official will fly for free,” he said.
He said the creation of the airline is necessary as it will help boost the growth of other industries.
“We will use the airline to grow other industries. The value of a national airline is much more than the losses the airline can make. Globally governments invest a lot of money in airlines because of their value,” he said.
Ethiopian Airlines, which will partner with the national carrier and has been operating a profitable airline for about six decades, says existence of uniquely dedicated and highly committed workforce, clear vision and well-articulated marketing strategy, continuous investment on human capital and clear relationship with the Ethiopian government have kept the airline afloat.
Ethiopian Airlines country manager Tigist Eshetu explains that the airline is a 100 percent government owned organisation, but ownership and management of the airline are completely separate while the management is handled by seasoned aviation professionals who run the airline as a business enterprise.
“We have a long term, 15 years fast, profitable and sustainable growth plan, called Vision 2025 that we have been successfully implementing for the last seven years. Frugality is our business philosophy. Our cost leadership stance has also contributed a lot to our achievements, producing the maximum value proposition at the least possible unit cost in the industry,” Ms Eshetu said.
She also said as a Pan-African airline, Ethiopian Airlines believes in the virtue of nurturing and ensuring that native African carriers get their desired market share instead of today’s paradoxical 20/80 ratio.
Ethiopian Airlines has been successfully discharging its Pan-African role for more than seven decades and even more to ensure Africa is well served through air connectivity and further realise an economically liberal Africa.
“Given our capability and proved experience in the industry, we are working with African governments that have shown interest in such collaborations. In fact ET is sharing its success story in Malawian and ASKY Airlines and we are confident enough that this will be replicated with Zambia Airways, even with better magnitude,” she adds.
With the level of commitment from Government and the engagement of a partner such as Ethiopian Airlines, it is hoped that Zambia Airways will hit the skies again but this time flying even higher than before.

 



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