"It's shameful that the UDF party wants to take us back to the dark days,"

Mr Gwanda Chakuamba (2003)

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Thursday, August 14, 2008

Govt to disband Air Malawi


Government has come out of its shell on Air
Malawi and says it plans to disband the airline and establish a new
entity in which Capital Hill will have 51 percent stakes.

In his wrap up statement to Parliament on Tuesday Finance Minister
Goodall Gondwe said Air Malawi has failed the country and a new airline
will be a solution to retain a flag carrier.

Gondwe said since 2004, government has spent considerable sums of money to ascertain the viability of the company.

He said the board of Air Malawi as well as management have tried
their best with various experiments to bring normality into the company
despite short spells of cash flow improvements that have been
advertised as profits.

"But in the end these too have failed and the financial situation is
now threatening the safety of its passengers. In the circumstances, it
seems proper for the government to make a long term decision, on the
matter that will satisfy both demands.

"We feel that a new airline could be re-established in which the
government will retain a 51 percent shareholding and a strategic
investor would be allowed to own 49 percent of the shares. The
Government would thus have a majority on the board of the airline that
would strictly be run on a commercial basis. In pursuing this deal, we
are looking at what other countries have done such as Nigeria, Kenya,
Zambia, Ghana etc," said Gondwe.

He added that for almost 30 years, Air Malawi has failed this
country to deliver services that are reliable and has from time to time
failed even to procure basic operational materials such as fuel without
government’s support.

"Indeed again and again it finds it difficult to even maintain its
membership of IATA and continues to damage the good name of Malawi by
ignoring its advertised time-tables. The comments it attracts
internationally have been unflattering. It is because of these problems
that the UDF Government decided to privatise Air Malawi and searched
for an investor to purchase it. It was however not successful as
prospective buyers found the airline unviable," said Gondwe.

He said now the question of how Air Malawi should be handled has been a difficult one.

"On one hand it has been argued, that the air line should be
maintained under any circumstances as it is our flag bearer around the
continent. That we should not sell the public asset to foreigners and
that we should therefore save and improve it at any cost.

"This is an understandable view and one which is shared by many. It
is an emotional view, but understandable. On the other hand it can be
argued equally legitimately that we must have an airline that provides
the public with an efficient and reliable service throughout the
country and one that is not a burden on the public finances so that it
does not compete with our ability to assure the public the basic needs
of life," he added.

Gondwe’s revelation puts to rest a heated debate that has ensued in
recent past as to whether government should sell the flag carrier or

The debate followed reports that government was negotiating with South African-based ComAir to buy off Air Malawi.

Commentators recently advised government against trading the
company, arguing that it is of great significance to the country as it
Malawi’s sole flag carrier.

Since then, a number of groupings have expressed interest to buy the
airline, among them the company’s managers and two local consortia.

Currently Air Malawi has three aircrafts but operates two aircrafts
the Boeing 707-300 known as the Kwacha and a 32-seater ATR42.

With the Kwacha grounded when a truck hit a pressurised area two
months ago, the airline has been chartering aircrafts from South
Africa’s Inter Air to operate on its flights.

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