Cash squeeze has Air Namibia sweating
17 July 2017 | Local News
The beleaguered national airline has been dealt another blow as the Ministry of Works and Transport informed its management that it is unable to honour its subsidy this month.
The news came on the same day that Air Namibia found out that the four aircrafts it leased from a French firm have been sold to Westair, reportedly without the management’s knowledge.
Westair is Namibia’s biggest private aviation company.
Works and Transport permanent secretary Willem Goeiemann last week wrote to the Air Namibia management, saying government was unable to honour the July subsidy due to the national airline.
“The Ministry of Works and Transport would like to inform Air Namibia that due to a very limited ceiling (fund allocation) for July received from treasury, the ministry is unable to pay for your government subsidy allocation. The ministry therefore advice Air Namibia to kindly makes other financial provisions to pay its leases, maintenance and fuel for July 2017,” Goeiemann wrote.
The ministry further requested in the letter that Air Namibia provide a table of all government funding and disbursements for the financial year 2017/18.
Contacted for comment yesterday, Goeimann told Namibian Sun that the matter is under discussion. He could not provide the exact subsidy amount due to Air Namibia.
The airline’s spokesperson Paul Nakawa said they have acknowledged receipt of the government communication. “Air Namibia is busy engaging the ministry, and the way forward will be shared at a later stage,” he said.
The airline too remained mum on questions about how much it pays for leases, maintenance and fuel and how it impact its operations.
Meanwhile, Air Namibia also learned on Wednesday that the four planes, leased since 2011 from Air France, are now owned by Westair.
The transaction between Westair and Air France transpired without the knowledge of Air Namibia's board or management.
Nakawa last week issued a notice to the airline's staff, saying it was not aware of the sale of the planes to Westair until Wednesday last week.
He said the company from which Air Namibia leases the four Embraer aircrafts for domestic and regional routes sold the planes to Westair.
“Management is busy attending to the matter therefore management request all staff to remain calm and it is hoped that operation will continue undisturbed while engagements are ongoing,” he said.
Nakawa said in the notice that there is a possibility that Westair will be substituted as the new lessor.
Meanwhile, Nakawa told Namibian Sun that Air Namibia has a valid and legally binding lease agreement with Air France/ HOP for the utilisation of the four Embraer Jet aircrafts.
According to him, the lease agreement with HOP ends early next year.
“Upon the expiry of the agreement the status will be assessed. Air Namibia expects the operations to continue as normal, without any interruptions. Due to obligations pertaining to confidentiality, the airline is not in a position to elaborate further.”
He did not respond to questions whether there was a breach in contract and if legal action would be considered.
It is reported that there are claims of several top ministers who are pushing for a private aviation company to benefit from Air Namibia deals.
Westair Group managing director Gustav Holz could not be reached for comment yesterday.
The Minister of Works and Transport, Alpheus !Naruseb, said he was informed by Air Namibia board chairperson Gerson Tjihenuna about the planes that were sold last week Wednesday.
“Other than that I have no clue what is going on with these deals,” he said.