Future in the balance

Air Namibia's future is set to be discussed at cabinet level in due course.The government's highest decision-making body will have to decide whether to throw the national airline a N$2.5 billion lifeline.Finance minister Calle Schlettwein did not set aside any money for the crippled airline in his mid-term budget despite a request from its former board chairperson, Dee-Sauls Deckenbrock.During a post-budget discussion, Schlettwein put the amount needed to rescue Air Namibia at N$2.5 billion.In a letter dated 28 August 2019, Sauls-Deckenbrock had asked for a slightly smaller short-term financial injection while the mid-term national budget was being finalised.“The company requires urgent shareholder capitalisation in the amount of N$1.6 billion to be paid in two tranches of N$800 million each by 31 August 2019 and 30 September 2019,” Sauls-Deckenbrock wrote, failure of which could result in Air Namibia's likely demise. Talks on a planned bailout would be held at cabinet level, Schlettwein said. He would not speculate about the likelihood of such a bailout.“We looked at the situation and we will inform cabinet,” said Schlettwein. “It is difficult for me to discuss the way forward. We are looking at a number of issues like job losses and very sensitive guarantees that may be called.”According to him, the situation regarding Air Namibia is dire. “The situation of Air Namibia is a complex and not a pretty picture that we see. For now we are seized with the matter,” he said.Namibian Sun approached Air Namibia for clarification on how long it could wait for extra funding before having to cease operations, but no response had been received by the time of going to press. During the recent budget discussion, Schlettwein said Air Namibia's failure to turn a profit since its establishment made it difficult for Treasury to decide whether to grant another bailout.“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,” Schlettwein said.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 state 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.Since 1998, the airline had received N$6 billion in bailouts, the Institute for Public Policy and Research (IPPR) reported in 2017.OGONE TLHAGE

Future in the balance

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Namibian Sun 2026-02-10

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Future in the balance

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Namibian Sun 2026-02-10

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