According to an exclusive report by the Financial Gazette, plans by the struggling Air Zimbabwe to lease modern passenger aircraft from Malaysia Airlines have come up against a brick wall.

The two parties reportedly could not agree on the terms and conditions of the multi-million dollar lease deal involving Boeing 787 Dreamliner aircraft.

Air Zimbabwe and Malaysia Airlines had opened discussions on the deal following President Robert Mugabe's visit to Kuala Lumpur, the capital of Malaysia, last year.

In a good twist however, the report also said progress had been made in sourcing at least four Boeing 777s from an undisclosed supplier, with the delivery of the first batch expected in the coming few months. It is not clear though, whether the aircraft will be leased or bought outright.

It also emerged that the Air Zimbabwe's board was considering establishing a new company to house the new fleet and start on a clean slate.

Air Zimbabwe is estimated to be owing a debt of about US$300 million which resulted partly from the high operational and maintenance costs of operating old and gas-guzzling aircraft.

Air Zimbabwe currently has a fleet of 2 Airbus A320-200s, 2 Boeing 737-200Advs, 2 Boeing 767-200ERs and 1 MA-60, all of which are very old. Only four of these are flying.