Americans seek N$2.3bn payment for aircraft lease
The Americans, who rejected attempts to exit an agreement that earned them N$32 million monthly from Air Namibia, are seeking final payment from the Namibian government, which was bonded to the lease agreement as a guarantor.
29 March 2021 | Transport
Government is busy negotiating terms of paying N$2.3 billion for two aircraft leased from an American company by liquidated Air Namibia.
Air Namibia was officially liquidated on Friday after no opposing papers were filed against a liquidation application brought by the Namibia Airports Company (NAC), which the national airline owes N$714 million.
And while many Air Namibia creditors will queue up to file for claims against the defunct airline, American aircraft leaser Castlelake will wait for its billions, after then minister of finance Saara Kuugongelwa-Amadhila bonded government to the deal as guarantor to the costly lease.
Castlelake bought Intrepid Aircraft Leasing LLC, which originally leased the planes to Air Namibia. With liquidation wrapped up, the Americans now want their planes back – as well as the N$2.3 billion owed to it by government after Air Namibia stopped paying for the leases.
According to the lease agreement, Air Namibia had to pay US$1.1 million (N$16 million) per aircraft per month – a figure the national airline could not consistently keep up with.
Agonised by the huge payments, public enterprises minister Leon Jooste in 2019 jetted to the USA to engage executives of the leasing companies with a view to exit the agreement, something that the Americans seemingly rejected because there was no exit clause in the agreement.
Approached for comment yesterday, Jooste said: “We are in the process of negotiating a settlement.” He did not detail what the nuts and bolts of the said settlement entail.
Irish planes to jet out
Meanwhile, two aircraft belonging to Irish company Air Lease 80 are set to leave Namibia. The planes, the largest in Air Namibia's fleet and which serviced the Windhoek-Frankfurt route, were scheduled to leave Namibia on 26 March but Namibian Sun can confirm that they remain parked at Hosea Kutako airport.
Air Lease 80 has ordered that its two 244-seater planes be delivered soonest to Leipzig, Germany.
The owners demanded the return of the planes after the government officially announced its intentions to liquidate Air Namibia.
Air Namibia's lease agreement on the Airbus plane stretched from May 2012 to October 2025, but the government's decision to shut the national airline down means this agreement would have to be cancelled – at a cost of around N$2.4 billion, The Namibian reported last month.
End of the flight
What remained of Air Namibia's wings was clipped on Friday when the High Court formalised the liquidation, after no opposition to this was filed against NAC's application. Liquidators Bruni & Mclaren have been instructed to oversee payment of creditors, who have to lodge their applications against the liquidated national airline.
The airline, whose liquidation has divided public opinion, had been bailed out to the tune of nearly N$9 billion over the past decade. President Hage Geingob first hinted at liquidation during his State of the Nation Address last year. This year, Cabinet collectively resolved to liquidate the company, which had over 600 employees.
Liquidating Air Namibia will cost the taxpayer about N$5.6 billion. The company's combined assets are worth just over N$900 million, far too little to cover what is owed to a myriad of local and foreign creditors.