Jooste dispels lease lawsuit fears
29 April 2021 | Transport
Public enterprises minister Leon Jooste has given his assurance that government will not be sued over the cancellation of a lease for two Airbus A330 aircraft that had formed part of Air Namibia’s fleet.
Government had agreed to a guarantee worth N$2.5 billion to secure the two aircraft. The aircraft never belonged to the national airline and with its liquidation, government is now attending to discussions over the state in which the aircraft will be returned as well as the lease agreement.
Namibian Sun reported in March that American company Castlelake wanted the aircraft returned and that government honour the costly lease agreement.
Jooste dispelled any fears government would face legal action, saying discussions had been ongoing for some time now.
“We have been negotiating with them since September last year and this is an agreed, controlled redelivery. We have draft heads of terms containing the commercial elements and legal principles whereafter the actual binding contract will be concluded. Government will therefore not be sued,” he said.
The guarantee and aircraft are to be treated from Air Namibia’s liquidation, Jooste further explained.
“These aircraft are separate from the liquidation as they are backed by full government guarantees. It is not a loan, it’s a lease and we are negotiating lease termination and return conditions,” he said.
According to the lease agreement, Air Namibia had to pay N$16 million (US$1.1 million) per aircraft per month, a figure the national carrier could not consistently keep up with.
Government in February announced its intentions to close down the airline, deeming it unaffordable to maintain, while the Namibia Airports Company and Belgian company Challenge Air had applied for Air Namibia’s liquidation in the High Court.
The airline, whose liquidation divided public opinion when it was announced, 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.
The two aircraft have since been returned to their original owners.