British Airways in Cape Town

From FinancialGazette.co.zw
29 June 2011

HOTEL operators in the country have urged government to look beyond Air Zimbabwe and consider opening the skies to save hospitality, freight and related businesses, stressing the collapse of the national airline heavily weighed on these industries.

Since the country’s independence in 1980, government has maintained a protectionist bulwark around the ailing national carrier for reasons related to national pride and still appears reluctant to cash up.

Air Zimbabwe has been grounded for the past three weeks after the Civil Aviation Authority of Zimbabwe (CAAZ) banned the national career’s short-haul Boeing 737s on grounds of age, barely two weeks after restive pilots ended a strike to protest an 80 percent salary cut.

Last month, the International Air Transport Association (IATA) also suspended Air Zimbabwe’s membership over debts and arrears amounting to US$280â-à000 in unpaid billing and ticketing fees, terminating the airline right to use IATA’s flight booking and finance services and cutting more than half its business.

Compounded by periodic strikes by restive pilots, a bloated retrenchment bill, high costs of flying an old fleet and a mounting debt overhang, the restrictive measures by CAAZ and IATA have virtually cut domestic and international connectivity, deflecting international passengers to regional hubs and depriving the country of potential hospitality business.

Zimbabwe Council for Tourism immediate past president and Rainbow Tourism Group (RTG) CEO, Chipo Mtasa, said the industry has been forced to engage charter flights to keep the flow of foreign visitors with confirmed bookings into Victoria Falls and other resorts.

“We’ve lost business as an industry. Domestic connectivity is a nightmare,” Mtasa said. “As RTG, we’re fortunate in that we’ve been closed for renovations. But all other operators have lost business. I think we should stop concentrating on Air Zimbabwe. We’re killing the industry. We need others players to come in.”

Only two airlines, Solenta and Aviant, are licensed to service domestic routes. Twenty-five more have permits for regional flights.

Mtasa said South Africa accounted for a majority of visitors into Victoria Falls, currently being served by South African Airways (SAA) and British Airways, the former of which reintroduced direct Johannesburg-Victoria Falls flights in 2009.

The South African hospitality industry has taken advantage of the collapse in Zimbabwe’s domestic connectivity to capture Zimbabwe-bound visitors, marketing Victoria Falls as part of its tourism packages, inclusive of fights to and from the resort – one of the world’s seven natural wonders.

The strategy has cut the number of nights visitors spend in Victoria Falls on one hand, and on the other boosted business for South Africa’s hospitality industry and the country’s national airline, which has gained increased control of passengers flying in and out of Zimbabwe.

Zimbabwe’s leading hospitality chains have reported that their portfolio mix remains dominated by city hotels as average occupancy and room rates in Victoria Falls and other resorts continue to hang about and below 50 percent and US$70, respectively, as a result of poor visits.

The Zimbabwe Tourism Authority has reported that Air Zimbabwe has lost significant market share to SAA since 2009, slumping to 22,1 percent in 2010 from 38,5 percent market share in 2008.

“If worse come to the worst, we’ll be forced to negotiate with foreign airlines and use Johannesburg or Livingstone airports for the sake of our international visitors. The situation is both unbearable and unsustainable. We’re killing the industry.”