Malawi puts state airline for privatisation

Malawi government is putting state-owned airline for privatisation to lessen the government’s financial burden in keeping running the financially struggling company.

The privatisation of Air Malawi will also involve the sale of the company’s subsidiaries, such as Lilongwe Handling Company and Airport Development, which are responsible for airport operations.

Malawi advertised the sale of the airline in 2003 but  rejected  a bid from  South African airline Comair, which was interested in buying some of the assets of Air Malawi.

Air Malawi

Comair submitted a formal proposal to the Malawi government to launch a new airline called Comair Malawi.

But government then suspended the sale of the company  after stakeholders criticised the privatisation campaign, arguing that previous sales of state assets have led to job losses and failed to make companies profitable.

But the government  now  says  Malawi Privatisation Commission will be inviting bidders  to buy the airline.

Privatisation Commission’s Chief Executive Officer Jimmy Lipunga said:”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 Lilongwe Handling Company (Lihaco)  as they will be delinked from Air Malawi Limited in a separate restructuring exercise,” Lipunga said.

Lipunga said 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,” he said.

“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 added.

Established in 1967, Air Malawi assets include a Boeing 737-300 aircraft and one other plane. Its international routes include Johannesburg and several other cities.

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