Air Namibia liquidation could attract other airlines

20 October 2020 | Transport

OGONE TLHAGE

WINDHOEK

The potential liquidation of Air Namibia could open the door for other airlines keen to enter the Namibian airspace.

This is the opinion of Plane Talking MD Linden Birns when he was asked to comment on the latest developments regarding the airline.

The action is being instituted after Air Namibia failed to honour a settlement agreement for the payment of approximately N$400 million to Challenge Air for leasing a jet from the Belgian company in 1998.

This legacy of debt stems from a dispute about the rent and maintenance of a Boeing 767-33 AER.

In 2008, Challenge Air obtained a judgment from a German court which ordered Air Namibia to pay it US$6.5 million for unpaid rent, maintenance and insurance of the Boeing.

In another judgment in July 2011, Air Namibia was ordered to pay an additional US$13 million in interest on the outstanding debt.

“The obvious consequence of a liquidation order would be the closure of the airline and the loss of jobs. This would also create opportunities for other existing or future Namibian operators, as well as foreign carriers connecting their home markets with Namibia,” said Birns.

Rescue plan

Air Namibia will require at least N$193 million to restart operations after months of huge losses and the grounding of commercial passenger flights due to the Covid-19 outbreak, daily New Era reported recently.

“Restart will be focused on viable routes and will gradually grow to the full schedule as aircraft and crew become available,” reads a proposal by Air Namibia. The plan will also include rightsizing the workforce to meet schedule demand.

“In partnership with the shareholder, stakeholders and foreign missions aggressively promoting Namibia as a safe and tourist destination,” the company said in a 32-page slide presentation.

The presentation, titled ‘Air Namibia Covid Revised Business Plan’, says the plan also includes implementing corporate and departmental scorecards according to business plan initiatives.

According to the draft plan, the airline owes N$707 million to suppliers, which includes about N$49 million to local suppliers, N$56 million to South African suppliers, N$21 million to regional suppliers, N$110 million in outstanding settlement payments to foreign suppliers and a N$214 million settlement payment to foreign service providers.

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