• by IPS Correspondents (lusaka)
• Thursday, November 10, 1994
• Inter Press Service

LUSAKA, Nov 10 (IPS) - Zambia's sole airline, the state-run Zambia Airways, is trapped in a financial swamp and is unlikely to extricate itself.

Hounded by creditors and abandoned by the government which traditionally covered its losses, the airline earlier this year embarked on a survival plan which involved immediate spending cuts.

It put up one of its better aircraft, a DC-8, for sale, recalled station managers from abroad, and grounded some pilots and cabin crew.

It also lowered the pilots daily transit allowances from 115 to 90 dollars, slapped a 23 per cent tax on all concessionary tickets, and began an exercise to lay off hundreds of its 1,378- strong work force.

However, the survival plan may have come too late.

The International Air Traffic Association (IATA) suspended the airline over a year ago for failing to settle arrears in excess of five million dollars.

Four months ago its biggest aircraft, a DC-10, was grounded for over a week when the Italian air company Alitalia refused to carry out routine maintenance work because Zambia Airways had failed to settle a multi-million dollar debt.

The DC-10 was eventually serviced, only to be grounded in Johannesburg in September for failing to meet IATA bills amounting to thousands of dollars.

The American firm, Greyhound, had meanwhile taken legal action against the airline for not settling an 8.9 million dollar loan acquired years earlier for aircraft refurbishment.

The last straw came last week. The Bank of New York, which is owed at least one million dollars by the airline, seized its two ATR planes, and local creditors grabbed its real estate -- Ndeke Hotel and the sprawling air crew residence in Lusaka.

Airline chief executive George Lewis concedes that Zambia Airways has reached the end of the road, unless the government steps in.

"Really, now it is the shareholders who can save the situation. On our part, we are helpless," he said.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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