HARARE, Sept. 1 (Xinhua) -- Zimbabwe's struggling national carrier incurred a loss of 44.77 million U.S. dollars in 2013 as high fuel costs and a significantly reduced route network impacted on the airline's viability, acting board chair Eric Harid said Monday.
He told a parliamentary committee that the airline has been making losses since 2004 due to operational challenges that include a ballooning debt, now standing at 302 million dollars, high fuel costs and an aged aircraft fleet.
"The reason why we are making losses is the short routes we are plying at the moment, the high cost of jet fuel and the aged fleet we are using," said Harid.
He said jet fuel in Zimbabwe costs 1.15 U.S. dollars per litre compared to South Africa's 0.89 U.S. cents. Out of the airline's 10 aircraft, only three were serviceable while route network had shrunk to less than 10 from around 20 at peak in the late 1990s.
Air Zimbabwe used to fly to such destinations as Kenya, Zambia, Mauritius, Malawi, the DR Congo, London and Beijing but foreign routes are currently confined to South Africa as operational challenges hamper route network expansion.
Harid said the airline required a total of 368 million U.S. dollars for recapitalization, with 331 million alone required for acquisition of a modern fleet.
He said the airline was losing significant business due to its suspension from the International Air Transport Agency (IATA) in 2012 over a 2.1 million U.S. dollars debt.
"We don't have capacity to get interconnecting passengers. We are losing passengers due to our absence on the IATA system," he said.
The acting board chair bemoaned low cargo business which was currently contributing only two percent to the airline's revenue. Although he did not give a figure, Harid said passenger business was the biggest contributor to the airline's revenue, followed by charter business at 39 percent.
The airline's acting chief executive Edmund Makona told the same committee that the biggest challenge facing the airline was its "safe but aged" aircraft fleet which consumed more in terms of fuel and maintenance costs.
"Air Zimbabwe is operating at an uncompetitive edge because of its aged fleet. The solution, therefore, is not necessarily funding but modernization of the fleet because then we will manage the issue of the biggest cost driver which is fuel," he said.
He also said the airline's losses were being compounded by fares that were below break-even point as the airline tries to woo customers since resuming operations in 2013 after suspension the previous year.
