Grounding Zambian Airways will have negative implications - ZACCI

Friday, September 12, 2008

Grounding Zambian Airways will have negative implications - ZACCI

Grounding Zambian Airways will have negative implications - ZACCI
By Chiwoyu Sinyangwe and Joan Chirwa
Friday September 12, 2008 [04:00]

GROUNDING Zambian Airways will not only erode investor confidence but will also be against the provisions of the Citizens Economic Empowerment Act, Zambia Chamber of Commerce and Industry (ZACCI) chief executive officer Justin Chisulo said yesterday.

But in a turn of events, transport minister Dora Siliya yesterday claimed media reports that she was trying to frustrate the operations of Zambian Airways were totally unfounded.

Chisulo said grounding Zambian Airways would negatively affect the growth of the Ministry of Communications and Transport as well as Zambia's general economy.

Chisulo stressed that he was making comments on the matter purely because it was a business transaction and not that Zambian Airways was a member of ZACCI.

“NACL (National Airport Corporation Limited) and Zambian Airways are purely two business entities. As to why Zambian Airways incurred that debt, it is up to them to disclose. From our own investigations, we are aware that as of now, Zambian Airways is paying between US $300, 000 to US $400,000 per month through landing rights, passenger ticket taxes etc,” Chisulo said. “And we speculate that part of the reason could be the high fuel cost. Now, whatever Zambian Airways and NAC agree upon, if it requires the ministry responsible to sanction as a policy issue, we would strongly urge the concerned minister to do so bearing in mind three things: this is a business transaction; second, the debt could have been brought about by high fuel cost and third, Zambian Airways is benefiting NACL to the extent of over US $300, 000 and therefore grounding of Zambian Airways would have negative implications to NACL, to the country but also to the employees of Zambian Airways.”

Chisulo also said policy decision might be required in view of the significance of the aviation sector to the growth of the Ministry of Communications and Transport.

“Above all, grounding of Zambian Airways would erode investor confidence and also the provisions of the Citizens Economic Empowerment Act,” said Chisulo. “Lastly, we know that (Zambian Airways and NACL), and the growth of the ministry in terms of the provision of policy direction depend on road, rail infrastructure and air infrastructure in addition to communication.”

And during a programme on Radio Phoenix yesterday, Siliya - who has U-turned on her earlier comments in the Times of Zambia last Friday that allowing a deferment of debt owed by Zambian Airways to NACL would be discriminatory and against public interest - said she would be a sad person to see a local airline collapse because of operational problems. Siliya said she had held meetings with management of NACL on how to assist the local airline in its operations despite the debt owed.

Discussions were being held on possibilities of deferring a US $1.6 million debt which Zambian Airways owes NACL, largely on account of rising operational costs brought about by high fuel prices. But the Times of Zambia, under the headline: 'Magande, Siliya clash over Zambian Airways', reported that Siliya was opposed to the deferment of the debt because she had earlier rejected unofficial requests of a similar nature from another player in the industry. Siliya was further quoted by the state-owned Times of Zambia as saying that there was nothing special about Zambian Airways for her to facilitate the deferment of the debt by Zambian Airways.

However, Siliya said yesterday such reports were not correct, as government's intention was to see local businesses operating without any problems.

“These media stories coming up are totally unfounded. I have had many discussions myself with the chief executive officer of Zambian Airways Mr Mutembo Nchito about the challenges facing the airline and I have done that with other airlines,” Siliya said. “I also met the acting managing director of National Airports who assured me that they will try to resolve some of the problems facing all airlines. It will be sad for me to see a local airline failing in its business, because we have to promote them.”

Siliya said people should keep politics out of business problems facing local investors.

“We should keep our politics out of this because what we need are business solutions. This government is made of laws, and as minister, I will provide policy direction,” Siliya said. “It is in our interest to see that Zambian investments are assisted. I was even summoned by the Acting President (Rupiah Banda) to discuss this matter.

He was surprised with accusations that we are being insensitive to the matter. We need business solutions to this matter and not political solutions, which do not last. I’m aware of what is happening and this is why Zambian Airways is still flying even today.

I believe that Zambian Airways is a very welcome business in the aviation sector and we have seen it grow in the last few years and I do not see how people can accuse me of trying to close the business. This government is committed to ensure those in business remain in business.”

Labels: ZACCI, ZAMBIAN AIRWAYS