Friday, 5 April 2013
Can Air Zimbabwe Become Successful Once Again?
Air Zimbabwe, the seemingly ailing national carrier is currently undergoing a restructuring programme aimed at making the airline competitive once again. Burdened with large debts and an ageing fleet of Boeing 767-200ERs and 737-200's, the carrier recently announced a fleet renewal exercise as part of the restructuring programme. Currently two Airbus A320's have joined the fleet with one recently undergoing safety inspections and certified to operate on regional routes such as HRE-JNB. Plans have also been availed to acquire new short range Embraer jets from the Brazilian maker.
But what exactly is the long term strategy for Air Zimbabwe? Several new routes have been mentioned including Durban, Mauritius, London, Lagos and Munich but is this really the best option? Currently the dominant legacy carriers on the African continent include South African Airways, EgyptAir, Ethiopian Airlines and Kenyan Airways. They are mainly characterized by their large fleets, hub-networks, expansive route-links as well as allegiances to alliances (Star Alliance, SkyTeam).
So the question is, can Air Zimbabwe compete with these dominant carriers? At the moment we have several smaller carriers making their mark on the African continent. These include Rwandair, Precisionair and probably the new player in the game Fastjet. So unlike the European and .U.S. markets where competition is highly saturated, the African market still has major potential for growth. So my next question is were does Air Zimbabwe fit into this whole picture?
As the legacy carrier that Air Zimbabwe currently is, the need to adopt a hybrid strategy can be critical to the revival of the airline. With the current small fleet it operates, a point to point strategy can be adopted where they focus on cutting costs and increasing efficiency, a strategy done very successfully by Easy Jet. At the moment Air Zimbabwe operates a Boeing 767-200ER on the HRE-JNB route which sits all day in Johannesburg before returning to Harare in the evening. The airline can adopt a fast turn-around strategy were they can do 4-8 profitable daily shifts between Harare and Johannesburg. But you ask, is there really a market for this? My answer is simply YES, but the challenge is the price. Middle income earners are not able to pay the current lowest price charged by SAA and BA Comair of $400 return trip. Air Zimbabwe can utilize their crew efficiently and adopt ancillary revenues methods from non-ticket sources such as baggage fees, food & beverage etc. Remember we are talking about point to point basis here so why not even fly into the cheaper airports like Lanseria.
Implementing Revenue Management systems to strategically control inventory, availability on GDS (Global Distribution Systems), and a reliable web presences can assist dearly in Air Zimbabwe's renewal. Some routes were Air Zim can successfully operate on a point-to-point include; Harare-Johannesburg, Harare-Cape Town, Harare-Durban, Bulawayo-Johannesburg, Victoria Falls-Johannesburg, just to name a few.
In conclusion, Air Zimbabwe can become a successful carrier once again with the right management team in place and a strategy that fits their current situation. We wish them best of luck in the near future.
Written by; Mlandeli Ndlela at HREAirportblog