Air Namibia loses N$100m a month

27 April 2020 | Transport

OGONE TLHAGE

WINDHOEK

Air Namibia has confirmed losing as much as N$100 million per month in revenue since its planes were grounded because of the coronavirus pandemic.

The government imposed a lockdown on 27 March, barring the entry of anyone except Namibian citizens or permanent residents, while travel within the country has been restricted within 10 zones until midnight on 4 May.

The national airline says it will continue to lose money until international travel returns to normal.

“Depending on how long the lockdown continues and depending on when other countries open their borders, irrespective when Namibia opens up, one can then do the sum,” said airline spokesperson Paulus Nakawa.

He added that many passengers were cancelling flights booked for the peak tourist season from July to October, further eating into non-existent revenue streams.

Government dependent

The government has been forced to bear the financial responsibility of some state-owned enterprises (SOEs) that find their operations hamstrung by the lockdown.

Public enterprises minister Leon Jooste confirmed that there were requests for funding from some SOEs that are not able to generate any cashflow as a consequence of the lockdown.

This comes as the business rescue practitioners of South African Airways, which was placed under rescue, opted over the weekend to hand out retrenchment packages to the 86-year-old airline’s nearly 5 000 employees.

“The sad reality is that our state-owned enterprises are not shielded from the economic effects of the pandemic and some of them are severely affected. This obviously depends on the level of direct economic exposure but Namibia Wildlife Resorts (NWR), Namibia Airports Company (NAC) and Air Namibia are the primary victims.”

Jooste said the government was sustaining Air Namibia financially at the moment.

“For now, we are carrying the cost of Air Namibia but it is obviously not sustainable and discussions between us and the ministry of finance are ongoing,” he added.

Jooste did not provide any financial figures when asked about the size of the total bailout package requested by the SOEs.

According to him, Air Namibia has sought a large subsidy.

“The NAC is more straightforward with manageable creditors but Air Namibia has large creditors and we have to consider a far larger subsidy in their case.”

The airline has for long been the recipient of enormous funding from government.

Funding requests made

Ministry of finance spokesperson Tonateni Shidhudhu confirmed the request for funding from the ministry of public enterprises under which commercial SOEs fall.

“There have been a number of submissions that have been received. Various sectors have made submissions and those sectors that have not made submissions are requested to do so,” he said.

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