Air Malawi sale flops

Gondwe who was delivering his 2008/09 national budget statement on Tuesday said, since 2004, government has spent considerable sums of money to ascertain the viability of the company.

“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,” said Gondwe, “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.”

He said because of these problems the previous Government decided to privatise Air Malawi and searched for an investor to purchase it.

“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,” said Gondwe.

He said in the end these too have failed and the financial situation is now threatening the safety of its passengers.

In the circumstances, Gondwe said 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% shareholding and a strategic investor would be allowed to own 49% of the shares,” said Gondwe.

He said 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.

Malawi government snubbed, South Africa Comair's bid to take over Air Malawi. The then transport and public works minister, Henry Mussa said that they were looking for a partner who would venture into a public-private partnership with it and not an outright buy-out as proposed by Comair.

He said, since Comair entered a franchise agreement with British Airways in 1996, they wanted to erase anything Malawian on the company and let it wear British Airways colours.

Former finance minister and member of parliament, Aleke Banda said that the airline should be maintained under any circumstances as it is the flag bearer around the continent.

But Gondwe said the question of how Air Malawi should be handled is a vexing one.

“On one hand it has been argued as 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,” Gondwe said.

On the other hand Gondwe said it can be argued equally legitimately that Malawi 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.”