in Business & Finance

Fly Modern Ark eyes 25% stake in Air Zimbabwe

Posted 2 January 2018 · Add Comment

Fly Modern Ark has submitted a proposal to the Zimbabwean government in which the South African start-up would equip Air Zimbabwe with Xian Aircraft Company turboprop equipment in return for a 25% stake in the state-owned airline, reports ch-aviation.

Documents indicate Fly Modern Ark had valued its 25% stake at around USD220 million. Of that sum, USD193 million would be used to acquire ten new MA-60 turboprops for Air Zimbabwe along with two MA-600(F)s.

An additional USD16.1 million would be used for training, spares, tooling and technical support, while USD10.9 million would be spent on operations, safety and marketing. Air Zimbabwe is an existing MA-60 operator with three acquired from China during the last decade.

A separate carrier, Fly Modern Ark South Africa, would also be established in South Africa to feed traffic into Air Zimbabwe's Harare International hub. Management would be elected by both Air Zimbabwe and Fly Modern Ark.

Air Zimbabwe has been unable to attract any meaningful investment owing to a USD300 million debt overhang racked up during the former Robert Mugabe regime. However, following Mugabe's overthrow in a de-facto military-backed coup in November, Zimbabwe's newly installed president, Emmerson Mnangagwa, has attempted to shore up international support for his government's efforts to revive the moribund Zimbabwean economy.

Earlier this month, Transport minister Joram Gumbo told the Daily News in an interview that despite injecting fresh funds into the airline earlier this year, Air Zimbabwe was still making USD2 million in monthly losses. As such, given its poor financial standing, it had failed to secure any meaningful interest from potential strategic partners.

“Cabinet approved the recapitalisation of AirZim. After the approval, we went around to negotiate with at least 12 airlines which included two African airlines, Ethiopian Airlines and Kenya Airways," he said. "We also targeted Malaysia Airlines, Lufthansa, Qatar Airways, Turkish Airlines, Emirates, Qantas, Singapore Airlines, and Air China but we discovered that we were not going to succeed in our negotiations because AirZim’s financials are in shambles and they were not attractive to any one of the airlines to try and go into partnership with us."

According to the minister, despite Malaysia Airlines' unwillingness to partner Air Zimbabwe, it did signal its willingness to sell the carrier its fleet of B777-200(ER)s.

“So I started negotiating to buy and so I informed government that I had clinched a deal with Air Malaysia to buy four Boeing 777 planes at USD70 million for all of them and I thought this was a good deal for Zimbabwe. But again government failed to raise the money. I was buying these for AirZim," he said.

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

First Rolls-Royce Trent 7000 production engine despatched

The first Rolls-Royce Trent 7000 production engine was despatched yesterday to the Airbus facility in Toulouse, in readiness to power Airbus’s latest aircraft, the A330neo, into service.

Ethiopian Airlines selects GEnx engines to power its additional Boeing 787 Dreamliners

Ethiopian Airlines selected the GEnx engine to power its six additional Boeing 787-9 Dreamliner aircraft. This selection increases Ethiopian Airlines' GEnx-powered B787 aircraft to 19 total.

Airbus forecasts $4.6 trillion worldwide market for commercial aircraft services over next 20 years

Ambitions to boost value to customers and reach $10bn of services revenues in commercial in the next decade

FIA2018: GECAS and Boeing announce agreement for 737-800 Boeing converted freighters

GECAS and Boeing has announced today that they have reached an agreement for 35 additional 737-800 Boeing Converted Freighters at the 2018 Farnborough International Airshow.

Ethiopian Airlines wins Best Airline in Africa award

Ethiopian Airlines has secured the top prize at the 2018 World Airline Awards being named the ‘Best Airline in Africa’ for the second time.

TS&S Signs MoU with Ethiopian Airlines

Turbine Services & Solutions (TS&S), a maintenance, repair and overhaul (MRO) provider for gas turbines and driven equipment that is wholly owned by Mubadala Investment Company PJSC (Mubadala), and Ethiopian Airlines (Ethiopian)

TAA SK0902311218
See us at
AviationAfrica_BT0607280219AirCargoAFA_BT220318210219AAD2018 BTGroundHandling BT2205130918