Zambia and Ethiopia are inching closer to jointly reviving the national carrier of the Southern African state, which went under in 1984 because of indebtedness.
However, economic commentators are sceptical of the US$30 million commercial venture to revive Zambia Airways claiming it has more shortcomings than benefits for Zambia. They have instead called for a feasibility study to determine its viability.
The government has roped in the Ethiopia Airlines and the national carrier is expected to take off, for the first time in decades, on 24 October. The inaugural flight is planned to coincide with Zambia’s 53rd independence anniversary.
Ethiopian Airlines, as a strategic partner, has invested US$13.5 million in the project for equipment and aircraft acquisitions.
Ministry of Transport and Communications Permanent Secretary, Misheck Lungu, has told The Southern Times that Ethiopian Airlines planned to provide three aircraft leased at US$9 million and provide a further security deposit payment of US$4,5 million.
“The required capital for the re-establishment of Zambia Airways is US$30 million and an additional US$11 million should be released to fund operations.
“Establishing a national airline is currently a priority looking at the benefits that will come with it,” Lungu said.
Ethiopian Airlines would own 45 percent equity in the commercial venture with Zambian government, through the Industrial Development Corporation, owning 55 percent.
The government has not yet signed a shareholder agreement with the Ethiopian Airways but negotiations are underway with the partners ahead of the re-launch next October, as a commercial venture, said Lungu.
“We have not yet signed a shareholder agreement with our strategic partner but suffice to say that the national carrier will be run by a competent board, which will be put in place by the two partners, and we would like to stress that there will be no political interference in the operations of the airline,” Lungu explained.
Zambia Airways is projected to service more than 90 cities across the globe after the signing of Bilateral Aviation Safety Agreements (BASAs) with other countries.
The national carrier was initially planned to operate domestically as a low-cost carrier. It is hoped that a strong airline partner in Ethiopian Airlines, as a member of the Star Alliance, will provide access to global networks, and at lower cost base.
The government is also banking on domestic air transport that is projected to grow at 13 percent per annum, and the international air transport expected to grow at a steady rate of 5 percent per annum.
However, aviation experts are concerned that the success of a revived Zambia Airways, which was shut down on account of poor management and lack of resources, could be affected by its past shortcomings and have urged that an independent and transparent feasibility study.
They said Zambia also needs to resolve its high indebtedness before venturing into the airline, which could drain on the treasury due to the competitive global aviation sector.
John Kasanga, a consultant, urged that Zambian government to put deliberate measures to ensure that Ethiopian Airlines does not monopolise the local market once the Zambian Airways is actualised.
Specific policy measures must be initiated to protect domestic players in the aviation industry, he said recently during a public discussion by the Economics Association of Zambia (EAZ) over the planned revival.
He argued that the Ethiopian Airlines might use its links with Zambia to frustrate other players in an effort to monopolise the market.
“There is a risk that Ethiopian Airlines might use its links with Zambia to foment a dominant position against our competitors, who are bringing traffic into Zambia, Government must guard against monopoly because once they (Ethiopian Airlines) clear others they can make adjustments to suit themselves,” said Kasanga.
“The coming of Zambian Airways should address the current high cost of flying and it would be folly to restart an airline without considering the shortcomings that led to the closure of the national carrier, once reputed: “Nkwazi or Wings of Africa”, Kasanga said.
He also implored the government to engage stakeholders throughout the implementation of the airline, adding: “Lessons must be learnt from the failed Zambia Airways if this project is to succeed.”
Source: southerntimesafrica.com
