7 December 2012

Zimbabwe: Airzim Claws Back in Market

Embattled national carrier Air Zimbabwe believes it will claw back its market share on the lucrative US$30 million-a- month Harare-Johannesburg route since re-introducing flights on this circuit two months ago.

The airline is currently pursuing a re-penetration pricing strategy through a promotional fare of US$317 return for economy class, which runs until December 31, 2012.

SAA and Comair charge an average of US$600 and US$450 respectively.

The absence of Air Zimbabwe on the route for the most part of the multi-currency era has meant South African Airways and British Airways Comair have been raking in all the revenue therefrom, which is about US$7 million a week.

Air Zimbabwe resumed flights to Johannesburg at the end of October on a four times-a-week frequency, flying the 767-200ER, which has a seating capacity of 203.

Airline spokesperson Shingai Taruvinga said plans were in place to gradually increase the frequency of the flights.

At present, the airline services the Harare-Bulawayo-Victoria Falls route using the smaller Boeing 737, with the domestic load factor at +80%. The London route will be re-introduced early next year.

During an Air Zimbabwe promotional trip last week, one passenger Advocate Neeta Nagar said she was happy the local airline was flying again, noting that other airlines were beginning to display monopolistic tendencies by manipulating the price.

The re-entry of Air Zimbabwe is set to realign the market.

ZTA chief executive Karikoga Kaseke said Air Zim had lost out on its brand presence and the re-penetration pricing were the best strategy it could pursue at the moment as it needed to regain the market share it had been gradually losing for over a decade.

At the moment Air Zim's load factor for the Harare-Johannesburg flight was at a growing 50%. However, Kaseke said the airline could not expect to regain its market in three months.

"It will take them a minimum of a year, provided government is willing to support them financially. Without that it will take longer." Kaseke said.

Tourism in Zimbabwe could never reach full potential if it was a destination which relied on foreign carriers, Kaseke stressed. A strong airline pulls other airlines into the destination and in turn pushes tourism, he added. The ZTA chief noted that because SAA was strong, the OR Tambo airport was one of the busiest in the world.

South Africa is the leading tourist destination in Africa and its national carrier, SAA, was a member of the largest air transport alliance in the world, Star Alliance.

Kaseke was against insistence that Air Zim should always be profitable, arguing that, the world over, governments supported their national carriers because of the role that air transport played in the development of an economy.

Profitability in airlines was therefore a myth, Kaseke asserted. He held that the viability or profitability of an airline lay in what it contributed towards economic growth.

Air Zimbabwe's reach at the moment is still limited although plans are in place to reintroduce the Bulawayo-Johannesburg flight and some international routes. Taruvinga said the introduction will be in phases.

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