Creditors circle Air Namibia

RONELLE RADEMEYERWINDHOEKThe turnaround plan for Air Namibia that minister of state-owned enterprises Leon Jooste submitted to the cabinet committee on the treasury last week does not propose liquidating the airline.Jooste confirmed this when approached for comment on news that Air Namibia had abruptly cancelled all remaining international flights yesterday. These include cargo flights and repatriation flights for Namibians returning from abroad. It appears that the surprise announcement was based on fears that the airline's creditors may attach its planes the moment that they land on foreign soil.President Hage Geingob said in his state of the nation address last week that Air Namibia must be liquidated, as it had become a serious problem.Werner Schuckmann, chief financial officer at Air Namibia, yesterday told Republikein that this statement had made the struggling airline's service providers and creditors nervous.One of the creditors is Challenge Air in Belgium, which is owed about N$400 million.This debt stems from a dispute about rental and maintenance of a Boeing 767-33 AER about 15 years ago.In 2008, Challenge Air obtained a judgment from a German court which ordered Air Namibia to pay it US$6.5 million for unpaid rent, maintenance and insurance of the Boeing.In another judgment in July 2011, Air Namibia was ordered to pay Challenge Air an additional US$13 million in interest on the outstanding debt.Late last year, the government provided a guarantee of N$578 million to allow Air Namibia to borrow money from commercial banks and keep Challenge Air from attaching its fleet of Airbus A330-200 planes used on the Frankfurt route.According to Schuckmann, Air Namibia's monthly payments to Challenge Air are overdue. Turnaround planJooste said yesterday that the cabinet committee on the treasury had discussed the turnaround plan for the airline and referred it to the cabinet committee on overall policy and priorities (CCOPP).“The president's comment was not based on the submission to the treasury committee. “We need to keep in mind that the Air Namibia problem has come a long way and has been before the CCOPP several times. “I presume the president's comment was inspired by this history,” Jooste said.Analysis of optionsThe possibility of liquidation was brought up in June last year when then finance minister Calle Schlettwein submitted an analysis of the airline's financial situation to the cabinet committee on the treasury.That document outlined four options for the airline's future.The first option was to continue with business as usual, with the taxpayer forking out N$3.5 billion over the next three years to keep it afloat.Plan B was a bailout plan which would require government to pump between N$2.5 and N$3.3 billion into Air Namibia.The third option was a new business plan and turnaround strategy costing N$4.1 billion, and the fourth was to liquidate Air Namibia and form a new airline to operate only profitable local and regional routes.Schlettwein said the liquidation option would limit the losses to about N$2.5 billion.His document showed that the government had injected N$8.3 billion into the national airline in the 20 years between 1999 and 2019.

Creditors circle Air Namibia

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Namibian Sun 2025-07-21

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Creditors circle Air Namibia

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Namibian Sun 2025-07-21

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