Saturday, 15 April 2017

ZIMBABWE: Airlines Ask For Cash, Because Of Shortage Of US Dollars

At least five global airlines including Qantas, Lufthansa, KLM Royal Dutch Airlines, Air France, and Delta Air Lines have instructed travel agents in Zimbabwe to only accept hard currency in the form of cash when selling tickets to customers in the Southern African state.

Owing to crippling shortages of foreign currency, foreign airlines have been unable to remit funds generated through local ticket sales. This has resulted in multiple instances of non-settlement of obligations by Zimbabwe’s banks, the report stated.

The report quotes a letter written by Qantas’ regional manager for Africa, Michi Messner, to travel agents saying IATA had advised them that the situation with the repatriation of funds out of Zimbabwe was worsening.

“Although IATA and member airlines are proceeding with lobbying efforts, the last sales period settled is for P2 Oct 2016 and current delay is sitting at 138 days. Qantas has a substantial amount outstanding from BSP Zimbabwe (IATA’s Billing and Settlement Plan) and to avoid further risk, we’ve taken the decision to discontinue ticketing for all travel agents with access to our stock effective immediately,” she said.

Earlier this year, the paper quoted local industry sources as stating that up to USD30 million worth of remittances had yet to be transferred to airlines that currently serve Zimbabwe including Ethiopian Airlines, South African Airways, Kenya Airways, Comair (South Africa) (operating as British Airways), Emirates, TAAG Angola Airlines, Air Namibia, and Malawian Airlines.

Local state-owned carrier Air Zimbabwe has also been affected with several aircraft currently grounded as they await the Reserve Bank of Zimbabwe (RBZ) to disburse the necessary funds needed to procure spare parts. Given the capacity shortage, aircraft have had to be wet-leased in Air Zimbabwe Chief Executive Officer Ripton Muzenda said this week.

Zimbabwe’s already lingering foreign currency shortage has worsened since near centenarian president Robert Mugabe and his ZANU-PF government announced the introduction of a quasi-currency late last year. Under the programme, the RBZ has issued “Bond Notes” which have been given 1:1 parity value to their US Dollar equivalents.

However, instead of ameliorating the situation, the introduction of the notes has only exacerbated the shortage of hard currency given the local populace’s past experiences with world-record hyperinflation and the now deprecated Zimbabwe Dollar.

For his part, Mugabe has persistently blamed alleged US and European sanctions for suffocating economic growth. Critics, however, have instead pointed to anti-investment policies as well as pervasive corruption.
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