Lonrho affiliate LonZim to launch Fly540 airline operations in Zimbabwe

LONDON – Lonrho PLC announced that LonZim Limited, in which it holds a 24.53 percent stake, is to launch operations of African low-cost airline Fly540 in Zimbabwe.

LonZim PLC (LZM.LN) said Wednesday that it is to commence operations for a Fly540 airline based in Zimbabwe to service both the domestic and regional markets and emerging local and connecting traffic.

Flights are scheduled to start from September 2009. Fly540 is a Lonrho PLC (LONR.LN) owned airline operating in Africa and to international standards.

Fly540 is being rolled out across Africa with local partners in each country, to service the domestic and regional African markets.

"We are flattered by the promising prospects of the Zimbabwean economy in the coming months and Harare is the ideal centre for our African operations," said a Senior executive for the company in London.

"We attended a business conference hosted for the Zimbabwe Prime Minister Morgan Tsvangirai here in London last week and the response for Zimbabwe was overwhelming, and I can assure you in future, Zimbabwe will soon be callenging South Africa in many business avenues if the politics is right" he said to our reporter. 

Zimbabwe is poised for a flood of investors following the establishment of a government of national unity between Robert Mugabe’s Zanu PF and Morgan Tsvangirai’s MDC. 

Fly540, also known as Five Forty Aviation, started operations in November 2006 from its base in Nairobi, Kenya.  It operates domestic and international passenger and freight services in East Africa. The move to Zimbabwe is part of the strategy to roll out the service across Africa with local partners in each country.

Lonrho holds a 49 percent stake in the airline.

Flights from Zimbabwe are scheduled to start from September 2009.

Fly540 Zimbabwe will deliver affordable air links to key domestic and regional cities from a Harare hub and will be an integral part of the Fly540 network that will be flying in nine African countries by the end of 2009, Lonrho said.  

The launch of Fly540 Zimbabwe is also central to LonZim’s investment strategy of identifying current market opportunities in Zimbabwe and establishing companies that will benefit from the economic recovery of the country.

LonZim Air, a wholly owned subsidiary of LonZim plc, has invested US$200,000 in obtaining the necessary air services licence. LonZim will invest a further US$4.3 million in an ATR 42 turbo prop from the Lonrho Aviation fleet, and US$ 2.0 million for the operational costs associated with commencing operations and a working capital provision of US$3.9 million for the first twelve months.

Lonrho is a pan-African company with a diverse portfolio of investments focusing on Africa.  Its investments range from primary infrastructure to transportation, support services, hotels and natural resources.

The Company is focused on servicing Western investment and African business by investing in emerging sectors across Africa, creating hubs of business through key investments. Lonrho is re-establishing a significant presence on the African Continent through strategic investments across sectors in fast-growing African economies.

Zimbabwe secured $950 million in credit lines from China to help rebuild the country’s economy, Prime Minister Morgan Tsvangirai announced on Tuesday.

China is engaged in partnerships with Western investors in its ventures across the World, and a good example is its strategic business partnership with British companies in Iraq.

Zimbabwe has appealed to the world for a "financial stimulus package" for its devastated economy, saying lack of foreign support put a recovery plan drawn up by the unity government in peril.

The southern African country says it needs $10 billion to rebuild dilapidated infrastructure and ease a 90 percent unemployment rate.

"The government through the minister of finance, secured credit lines of almost $950 million from China," Tsvangirai said in a news conference.

Tsvangirai, who shares power with President Robert Mugabe, said a three-week tour he conducted of the United States and Europe had yielded pledges totalling more than $500 million.

"The amount of assistance that was raised on my visit to Europe and the United States does not reflect the enormous support we will be able to utilise if we are to fulfil all our political obligations," he said.

He said other promises of aid would be fulfilled only when Zimbabwe created a democracy and improved human rights after what critics say is Mugabe’s repressive rule.

"If we want outside assistance, we must first prove that we are able to fulfil the obligations we have undertaken within the agreement that was brokered by SADC," Tsvangirai said.

"Actions speak louder than words and while I was away there were instances of peaceful protestors being beaten by our police, innocent individuals arrested on trumped up charges and continued vilification of the MDC by the state media."

Zimbabwe’s MDC ministers boycotted a cabinet meeting chaired by President Robert Mugabe on Monday, saying it had been brought forward to stop Prime Minister Morgan Tsvangirai from presiding over it.

Tsvangirai’s Movement for Democratic Change (MDC) party formed a fragile coalition government with Mugabe’s ZANU-PF in February, raising hopes this would end a long-running political crisis and a decade of economic ruin.

Mugabe chairs cabinet meetings held every Tuesday and Tsvangirai presides in Mugabe’s absence.

Thokozani Khupe, deputy prime minister, said Mugabe was due to leave for Libya later on Monday and Tsvangirai, who has returned from a tour of European countries and the United States, would have presided over the meeting on Tuesday.

Khupe told journalists the decision was one of several unilateral decisions made by Mugabe, disregarding a political agreement reached last year.

"The decision seeks to deny the recognition of the prime minister as chair of cabinet when the president is away. This reflects unilateralism, disrespect, contempt and the refusal to recognise reality," Khupe said.

ZANU-PF officials were not immediately available for comment.

During his overseas tour, Tsvangirai sought to play down disagreements with Mugabe, saying he had a working relationship with the veteran 85-year-old leader. 

But Khupe said Mugabe continued to violate the political agreement, including failing to swear-in senior MDC official Roy Bennett as deputy agriculture minister, while the national security council had never met because "a few elite securocrats do not recognise the authority of the new order".

She said ZANU-PF was frustrating media reforms while MDC legislators and civil society members continued to be victimised and arrested.

The MDC has already asked the regional Southern African Development Community to mediate in a dispute over the appointment of the central bank governor and attorney general.

"For a long time we have remained the polite and subservient upholders of the GPA (global political agreement)," said Khupe.

"Whilst we remain fundamentally committed to the GPA in the interests of our people, it is our constitutional right to consider disengagement," she said, without elaborating.

Tsvangirai has said his party would not quit the unity government and told Reuters on Saturday that Western pressure for Mugabe’s removal could lead to chaos in Zimbabwe.

Western donors, crucial for Zimbabwe’s recovery from a 10-year economic crisis, have said their aid will only flow to the southern African country when reforms are implemented.