Air Namibia warns of closure

The national airline has cut its operating costs to the bone while waiting for a cabinet decision on its N$2.5 billion bailout request.

28 November 2019 | Transport

Air Namibia says it will be forced to close down if no bailout package is forthcoming from the Treasury.

Finance minister Calle Schlettwein recently expressed doubt whether the airline's request for a N$2.5 billion bailout could be met, saying the government was unable to fund the airline's operations.

Air Namibia spokesperson Paul Nakawa says the airline is trying to operate on a shoestring budget.

“In an event support is not granted, day-to-day operations will be affected. It is a situation where we need to learn to do more with less, as a nation,” Nakawa said.

“Austerity measures are being put in place, and that is the way forward,” he added.

The airline recently announced that it would stop serving meals on its regional flights.

A dry snack with fruit juice, still or sparkling water will be offered in the place of the hot meals previously served. This applies to all flights of less than two-and-a-half hours, irrespective of the time of departure or aircraft type.

The airline also announced that alcoholic beverages, tea and coffee would no longer be offered to economy-class passengers.

The airline currently serves only water on its domestic flights to Katima Mulilo, Rundu, Ondangwa, Lüderitz and Oranjemund.

Air Namibia is determined to maintain its international flights to and from Germany, although there are other airlines serving the European routes.

“Air Namibia is still the only airline that provides year-round daily flights between Frankfurt and Windhoek. We also designed a schedule that allows maximum connection from the entire Europe to Namibia via Frankfurt Airport,” Nakawa said.

“Regarding the subsidy, it is important though to understand that the minister has a difficult task of having to balance the limited resources among the many critical and important competing national priorities,” Nakawa acknowledged.

Asked about the airline's bailout request after the mid-term budget review in October, Minister Schlettwein said: “We have not made money available to bail it (Air Namibia) out.

If you look at Air Namibia, you have to realise that for the last 29 years there was not a single year where Air Namibia contributed to the state coffers; it has never made money.”

This situation was further exacerbated by the airline's inability to turn a profit despite interventions to steer it to financial viability, Schlettwein explained.

“The drain on coffers was becoming worse and that was despite two turnaround strategies that were aimed at improving it.

“We are at a point where we have to crucially think; if we put in what they have asked us to put in, that is N$2 billion, is that the best way to spend money to create jobs, to grow the economy? The answer is obviously no,” said Schlettwein.

“The N$2 billion we give to Air Namibia would not create a single job, it would just pay debt and perpetuate a situation that is unsustainable… if we give N$2 billion this year, the same request would come to Treasury next year, another N$2 billion and maybe another N$3 billion,” the finance minister said.

OGONE TLHAGE

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