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African governments urged to commercialize airlines
POSTED: 9:46 a.m. EDT, December 18,2006

African governments should create a conducive environment for non-centralized airlines in view of making them viable entities, an official has said.

Air Zimbabwe board chairman Mike Bimha was quoted by The Sunday Mail as saying that the consensus was reached during this year's annual African Airlines Association meeting held in Cairo, Egypt, last month that national airliners had to commercialize so as to move with world standards.

"The governments have right in national airlines, but that does not mean an airline cannot be turned into pure business lines," said Bimha.

He said the issue could be the same with Air Zimbabwe, which should be turned from a loss making company to a viable and commercialized institution.

Bimha said Air Zimbabwe has the potential to break even and become profitable. "All that is needed is for the government to create an environment conducive for an autonomous airline that can declare dividend to its shareholders," he said.

He said a lot of restructuring was taking place within airlines in the African Region and it was a major challenge for Air Zimbabwe to follow suit.

He said the national airline should take some notes from Kenya Airways, whose latest financial results have beaten all time records despite the challenge of the cost of jet A1 fuel.

Egyptian Air was described as one of the African airlines which is doing well. The Egyptian Air is now found in major routes such as Europe and the Gulf region. The airline has taken Europe into Africa. It is also the first country to become a member of the elite Star Alliance Group, he said.

Bimha said a lot of strategies had taken place for these airlines to transform themselves into viable companies they are today.

"Safety has been enhanced within such airlines amongst other things," he said, adding that modernization should not be ruled out because the older the equipment the larger amount of fuel that is needed and bigger the operational costs.

He said fuel constituted more than 40 percent of the operational costs as it does not usually come cheap adding that modern day aircraft conserve the liquid.

He said Air Zimbabwe should be poised in putting much effort in Cargo business for the enhancement of exportation and importation of various goods for the recovery of the economy.

Air Zimbabwe is one of the parastatals that has been ailing because of poor management. In 2000 the company almost became grounded because of viability problems.

Strategies have now been put in place to ensure that the company is revived. Recently the company indicated that it would soon introduce e-ticketing as a modern advancement, a technology to be adopted by all airlines by December 31, 2007.

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