Government to offload Air Malawi

The government of Malawi through its agent the Privatisation Commission (PC) has announced that it has embarked on another search to identify a competent strategic equity partner for the country’s national flag carrier, Air Malawi.

This is the third time government is offering the airline to the private sector after two attempts in 2003 and 2008 failed to materialise.

Privatisation Commission’s Chief Executive Officer Jimmy Lipunga said that the government is optimistic that a fair deal would come through this time around since the approach is different from the previous ones and the aviation sector is currently booming.

Lipunga said only the passenger service of Air Malawi is being offered to strategic partners as the airline’s subsidiaries of Lilongwe Handling Company (Lihaco) and Air Cargo would be delinked from the group.

“In order to sustain the country’s Bilateral Air Services Agreements, the level of participation of Malawian nationals and government shareholding is supposed to be 51 percent. For this purpose, Air Malawi Limited excludes its wholly owned subsidiaries of Air Cargo and Lihaco as they will be delinked from Air Malawi Limited in a separate restructuring exercise,” Lipunga said.

He said the government wants to have a vibrant aviation sector which would greatly serve the nation and minimise exploitation of the travelling public.

“An efficient aviation system will greatly unlock the huge economic potential in the area of tourism. There is need for Air Malawi to be competitive so that escalating air fares are managed in such a way that people are not exploited.

“During the last few years the aviation sector has experienced soaring fares due to lack of competition primarily caused by inadequate capacity on the part of the national flag carrier,” Lipunga said.

Air Malawi has debt which at one point was said to be over K6 billion but Lipunga said all of the airline should not panic as the government would be cleared off all the airline’s liabilities.

“As part of the restructuring effort, the government of Malawi, as a shareholder, has made an undertaking to honour theliabilities of Air Malawi Limited. An administrator is being engaged within the provisions of the Companies Act to facilitate the settlement of debts after a validation exercise of assets and liabilities,” Lipunga said.

The PC said there is potential for Air Malawi to introduce new routes.

Air Malawi operates scheduled services to five regional destinations of Nairobi, Johannesburg, Dar es Salaam, Lusaka and Harare including three domestic destinations from Chileka Airport and Kamuzu International Airport.