South African Start-Up Interested In 25% Stake In Air Zimbabwe
A proposal has been submitted to the Zimbabwean government by Fly Modern Ark in which the South African start-up would provide Air Zimbabwe with Xian Aircraft Company turboprop equipment in return for a 25% stake in the state-owned airline. Air Zimbabwe is an existing MA-60 operator with three acquired from China during the last decade.
Fly Modern Ark had valued its 25% stake at around USD220 million, of which 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.
Fly Modern Ark South Africa, which is a separate carrier, would also be established in South Africa to feed traffic into Air Zimbabwe’s Harare International hub. Both Air Zimbabwe and Fly Modern Ark will elect the management.
Meaningful investment hasn’t been attracted by Air Zimbabwe due to a USD300 million debt racked up during the former Robert Mugabe regime. However, after Mugabe was overthrown in a de-facto military-backed coup in November, Zimbabwe’s newly installed president, Emmerson Mnangagwa, has attempted to strengthen international support for his government’s efforts to revive the moribund Zimbabwean economy.
Transport minister Joram Gumbo, in an interview earlier this month, said that despite introducing new funds into the airline earlier this year, Air Zimbabwe was still making USD2 million in monthly losses. Given its poor financial standing, it had failed to secure any meaningful interest from potential strategic partners.