The Centre for Trade Policy and Development (CTPD) has advised the government to stop taking steps towards re-launching of Zambia Airways following increased risk of failure and the need for fiscal discipline.
In a statement issued to Money FM News, Centre Senior Researcher, Bright Chizonde said this is because the global tourism and air transport sector has suffered the most direct negative impact of the COVID-19 pandemic.
Mr Chizonde noted that the International Air Transport Association (IATA) estimated that worldwide flights were 70% lower at the start of April 2020 as compared to the first quarter of 2020 and the drop is projected to continue on account of travel slowdown and regional restrictions.
“CTPD thinks that the decision to relaunch Zambia Airways should be “quarantined” due to the increased risk of failure and the need for fiscal discipline,” He said.
“Firstly, the global tourism and air transport sector has suffered the most direct negative impact of the COVID-19 pandemic. International Air Transport Association (IATA) estimated that worldwide flights were 70% lower at the start of April 2020 as compared to the first quarter of 2020. This drop is projected to continue on account of travel slowdown and regional restrictions,”
He also said projections by the Centre for Aviation projects (CAPA) that by the end of May 2020, most airlines in the world will be bankrupt, is a clear indication that the environment is no longer allowing for Zambia Airways to be re-launched.
“The CAPA Centre for Aviation projects that by the end of May 2020, most airlines in the world will be bankrupt. It is therefore clear that the environment is no longer allowing for Zambia Airways to be re-launched. The government should, therefore, take actions to “quarantine” this decision,” He explained.
Mr Chizonde adds that any move by the government towards the relaunch of Zambia Airways, such as the delivery of planes and consequent commencement of payment towards the lease of these planes, would reflect a serious lack of fiscal discipline to Bilateral Partners it has been engaging with centred around the possibility of them meeting the financing gap arising from the adverse effects of COVID-19.
“Secondly, the Minister of Finance, Bwalya Ng’andu recently announced that Zambia has applied to the World Bank, the African Development Bank and Afrexim Bank to be considered for support under their various COVID-19 Emergency Funds, but CTPD, however, believes that any move by the government towards the relaunch of Zambia Airways, such as the delivery of planes and consequent commencement of payment towards the lease of these planes, would reflect a serious lack of fiscal discipline,” Mr Chizondi said.
He further advised the government to stop taking steps towards the re-launching of Zambia Airways. Now is the time to focus all the available public resources on fighting COVID-19 and its economic impact through a meaningful recovery program and investing in sectors that can help stimulate economic growth and ultimately contribute towards reducing poverty.