Air Zimbabwe’s Financial Turbulence Deepens as Airline Records US$11.6 Million Loss

By Staff

HARARE – Air Zimbabwe recorded a pre-tax loss of US$11.6 million for the year ended December 31, 2024, with the Auditor-General warning that the national carrier faces significant uncertainty over its ability to remain financially sustainable.

According to the airline’s 2024 audited financial statements, Air Zimbabwe received an unmodified audit opinion, meaning its financial statements fairly present its financial position in line with International Financial Reporting Standards (IFRSs). However, the Auditor-General highlighted serious financial challenges that continue to threaten the airline’s future.

The audit revealed that the airline’s current liabilities exceeded its current assets by US$26 million, while its pre-tax loss widened from US$10.4 million in 2023 to US$11.6 million in 2024.

The Auditor-General said these financial conditions represent a material uncertainty that could cast significant doubt on Air Zimbabwe’s ability to continue operating as a going concern, although the audit opinion itself was not modified.

Beyond its financial losses, the airline was also cited for failing to meet some of its statutory obligations because of persistent cash flow constraints.

As of December 31, 2024, Air Zimbabwe had outstanding statutory payments totalling US$20,498, contrary to the requirements of the National Social Security Authority (NSSA) Act and the Income Tax Act. The Auditor-General warned that delayed payments could expose the airline to penalties and interest charges.

The audit recommended that management strengthen revenue-generation initiatives and improve cash flow management to ensure statutory obligations are settled on time.

In its response, Air Zimbabwe acknowledged the liquidity challenges, saying delayed payments were a result of cash flow shortages.

"Observation is noted. Owing to liquidity constraints, the airline at times delays payments. This is being attended to through various strategies aimed at improving revenue inflows," management said.

The audit also found that the airline had made limited progress in implementing recommendations from previous audits. Of six issues reviewed, only one had been fully resolved, while three were partially addressed and one remained outstanding.

Among the unresolved concerns was the airline’s investment property portfolio, with auditors noting that one investment property had deteriorated and was no longer habitable, preventing it from generating rental income.

Property ownership documentation also remains incomplete. Air Zimbabwe has secured title deeds for only three of its 19 properties, while ownership documents for the remaining 16 properties are still being processed.

Other governance issues, including Value Added Tax (VAT) compliance and the filling of key vacant positions, were only partially addressed. However, the airline was commended for improving its bank reconciliation processes, with reconciliations now being prepared and reviewed on schedule.

The latest audit underscores the continuing financial and governance challenges facing Zimbabwe’s national airline as it seeks to restore operational stability and long-term viability.