Air Namibia looks ahead

The national carrier's focus for this year is the finalisation of its Integrated Strategic Business Plan.

13 January 2020 | Transport

While Air Namibia has faced major challenges in 2019, the airline's focus for this year will be the finalisation of its Integrated Strategic Business Plan (ISBP).

According to the company's interim CEO Xavier Masule, the key focus for January and February is the finalising the ISBP, which will be the blueprint to achieve the desired financial objectives.

Masule said the envisaged ISBP will contain business model and organisational structural changes, with strategic initiatives aimed at revenue enhancement, strategic cost containment, efficiency improvements, customer service excellence, human capital development and productivity improvement.

According to Masule, 2019 was by far the most difficult year in the history of the airline, due to internal and external pressures.

“We are happy to have survived the challenges and we believe that 2019's experiences will go a long way as key inputs for turning around the financial fortunes of Air Namibia.”

He said some of the factors that threatened Air Namibia's operations last year were the airline's projections that it will have a cash flow deficit of N$1.6 billion by the end of March 2020, inclusive of the accumulated cash flow deficit brought forward from previous years as well as the full amount claimed by Challenge Air.

Masule further said Air Namibia's key source markets for passengers and cargo traffic (Namibia, South Africa and Angola) continued to experience negative growth, with some of these countries being in depression while others are in recession, impacting revenue-generation negatively.

“Competition from large well-resourced network carriers continued to intensify, inclusive of Lufthansa's re-entry into the Namibian market, while KLM, Ethiopian and Qatar Airlines increased their foothold in the Namibian market. Air Namibia further welcomed the entry of a competitor in the domestic market in the name of Westair,” according to Masule.

He added that Air Namibia's attitude towards competition is that it is unavoidable and “imposes pressure on our business to become more efficient and strive for excellence to remain relevant and to succeed”.

Masule said to ensure the continuation of the airline's undented safety record, as well as continuous compliance to applicable regulations, the entire fleet underwent mandatory 'heavy maintenance' checks over a 18-month period ending November 2019.

“These heavy scheduled maintenance activities required significant cash outlays costing hundreds of millions of Namibian dollars, resulting in some of the aircraft remaining grounded for extended periods of time while funding solutions were being pursued. The impact thereof was the airline operating well below its normal revenue-earning capacity and the published schedule was disrupted.”

Masule said the Challenge Air court case, which started in 1998 and related to a dispute on an old aircraft lease agreement, also resulted in significant amounts of the airline's cash earnings being seized through court orders in Germany.

“Given the negative publicity covered in both the local and international media houses around Air Namibia's risk of closure, some suppliers changed their trading terms by terminating the supply arrangements, demanding upfront payments or demanding security deposits for goods and services required for the airline's operations. This put further pressure on the airline's ability to trade as a normal going concern,” said Masule.

According to him, cash flow shortages resulted in the delayed payment of some employee benefits and payroll deductions to service providers, such as medical aid, retirement funds and home loans.

Masule added that in response to these challenges, aimed at ensuring business continuity, some measures were implemented, which all contributed to the airline continuing to trade, albeit under difficult conditions.

ELLANIE SMIT

Similar News

 

The struggle to get home

8 hours ago | Transport

Ester KamatiWindhoek The owner of a Khomasdal home shop and takeaway, Gerhard van der Westhuizen, says he is concerned about the safety of his staff,...

Air Nam, Westair grounded

6 days ago - 26 March 2020 | Transport

JEMIMA BEUKESWINDHOEKLocal airlines Air Namibia and Westair have suspended all their international, domestic and regional passenger flights.Westair's suspension would be effective from yesterday until 18...

Coronavirus: Air Namibia jets out 154 foreigners

1 week ago - 24 March 2020 | Transport

OGONE TLHAGEWINDHOEKAir Namibia has confirmed that it flew passengers to Addis Ababa, Ethiopia, on a special chartered flight to repatriate stranded foreigners on Sunday.Flights to...

Buses, taxis come to a standstill

1 week ago - 20 March 2020 | Transport

ESTER KAMATIWindhoek The public transport industry is feeling the impact of the coronavirus pandemic as many Namibians opt to stay home.Warnings to avoid public...

Top Air Namibia executive resigns

2 weeks ago - 16 March 2020 | Transport

Air Namibia has announced that its general manager of commercial services, Xavier Swaniso Masule, has resigned with effect from 10 April.The process to recruit his...

N$21m upgrades at Hosea Kutako

2 weeks ago - 12 March 2020 | Transport

To date, N$21 million has been spent on a massive congestion alleviation project at the Hosea Kutako International Airport, which kicked off at the end...

TransNamib to borrow against assets

3 weeks ago - 11 March 2020 | Transport

TransNamib is set to leverage its fixed assets to cover the costs of funding its N$2.5 billion strategic business plan.Government has made it clear that...

AaNamibia yatatu mboka ya kwatwa po moAngola ya mangululwa

1 month - 24 February 2020 | Transport

Aalumentu yatatu AaNamibia ya za moshitopolwa shaKavango West, mboka ya tulwa miipandeko moAngola muNovemba gwomvula ya piti, sho ya hwikepo aniwa ondunda yamwene...

Air Namibia appoints new acting CEO

1 month - 12 February 2020 | Transport

Air Namibia has appointed its chief human resources officer, Elia Erastus, as acting CEO until a substantive CEO is appointed.According to Air Namibia, this follows...

Air Namibia suspends Luanda route

1 month - 06 February 2020 | Transport

The national carrier announced yesterday that it will suspend its Windhoek-Luanda route effective this Sunday due to a drop in passenger demand. ...

Latest News

Holes emerge in lockdown plan

8 hours ago | Disasters

JEMIMA BEUKESWINDHOEKWith law-enforcement agencies having their hands full monitoring entry into the locked-down Erongo and Khomas regions, an oversight has led to the different routes...

49 now quarantined at Zambezi...

8 hours ago | Disasters

ELLANIE SMIT WINDHOEKAbout 49 Namibians, including immigration officials and students, are in quarantine at the state-owned Zambezi Waterfront Tourism Park in Katima Mulilo. Zambezi governor...

‘Govt must feed us’

8 hours ago | Disasters

ILENI NANDJATOOSHAKATIInformal traders are appealing to the government to feed them after the coronavirus outbreak necessitated the closure of open markets and the halting of...

April 1 no fool’s day...

8 hours ago | History

STAFF REPORTERWINDHOEKThe former chief of staff of Swapo’s armed wing PLAN, Charles Namoloh, says it is time the nation recognised the historical importance of 1...

Samherji’s Fishrot boss back on...

8 hours ago | Fishing

CATHERINE SASMANWINDHOEKThe Icelandic company implicated in the Namibian Fishrot scandal, Samherji, last week announced that its disgraced former CEO, Thorsteinn Már Baldvinsson, would return to...

Agriculture battles coronavirus

8 hours ago | Agriculture

STAFF REPORTER WINDHOEK While the agriculture ministry has gathered all stakeholders to discuss the impact of the coronavirus on the livestock sector, the industrialisation ministry...

Farmers keen on AALS

8 hours ago | Agriculture

ELLANIE SMIT WINDHOEK There has been a marked interest from farmers, particularly from previously disadvantaged backgrounds, regarding the Affirmative Action Loan Scheme (AALS).Agribank's manager for...

Students raise online learning concerns

8 hours ago | Education

Ester KamatiWINDHOEKThe Students Union of Namibia (SUN) wants the University of Namibia (Unam) to reconsider its decision to offer online learning, due to poor internet...

The struggle to get home

8 hours ago | Transport

Ester KamatiWindhoek The owner of a Khomasdal home shop and takeaway, Gerhard van der Westhuizen, says he is concerned about the safety of his staff,...

Load More