New N$4.7 billion business plan for Air Namibia
13 November 2020 | Transport
OGONE TLHAGE
WINDHOEK
The board of Air Namibia presented a new business plan to public enterprises minister Leon Jooste this week.
The plan forms part of a revised initiative to turn around the fortunes of the state-owned airline.
“The Air Namibia board presented a new business plan valued at N$4.7 billion. The new business plan is slightly different from the previous business plan that was presented to the ministry,” Jooste said.
The new business plan's approval would hinge on how compelling it would be to government, Jooste pointed out.
“We need to be convinced that they have a proper strategy; they have to convince us,” Jooste said.
Options
Several options had been mooted by former finance minister Calle Schlettwein last year, including liquidating the airline.
Options listed by Schlettwein included a board-supported bailout plan that would cost the government in the region of N$3.5 billion, which would see the airline continue in its current form for three years, The Namibian reported last year.
Schlettwein's submission includes four cost estimate options on how much the government would need to keep the national airline operating.
One of the options was that Air Namibia would need N$3.5 billion to continue operating in its current form for three years.
Another plan includes a board-supported bailout plan, and would cost between N$2.5 billion and N$3.3 billion.
The third option is a new business plan that would need N$4.1 billion, while the fourth is the total closure of the airline - the option recommended by Schlettwein.
Liquidation
“This scenario assumes liquidation of Air Namibia. The government liability of approximately N$2.5 billion under the remaining government guarantee for the lease agreement of the A330s will stand,” the cabinet document said.
“The scenario is financially the most predictable [N$2.5 billion worst case] and therefore the preferred option,” the document said.
Jooste says he will hold meetings with the ministries of finance and transport to reflect on the new business plan and to chart a way forward for the airline in the coming days.
A N$193 million business plan was recently submitted by the board for the resumption of the airline's post-lockdown operations.
The airline has resumed flights domestically and to South Africa, utilising its Embraer 135 regional jets.
WINDHOEK
The board of Air Namibia presented a new business plan to public enterprises minister Leon Jooste this week.
The plan forms part of a revised initiative to turn around the fortunes of the state-owned airline.
“The Air Namibia board presented a new business plan valued at N$4.7 billion. The new business plan is slightly different from the previous business plan that was presented to the ministry,” Jooste said.
The new business plan's approval would hinge on how compelling it would be to government, Jooste pointed out.
“We need to be convinced that they have a proper strategy; they have to convince us,” Jooste said.
Options
Several options had been mooted by former finance minister Calle Schlettwein last year, including liquidating the airline.
Options listed by Schlettwein included a board-supported bailout plan that would cost the government in the region of N$3.5 billion, which would see the airline continue in its current form for three years, The Namibian reported last year.
Schlettwein's submission includes four cost estimate options on how much the government would need to keep the national airline operating.
One of the options was that Air Namibia would need N$3.5 billion to continue operating in its current form for three years.
Another plan includes a board-supported bailout plan, and would cost between N$2.5 billion and N$3.3 billion.
The third option is a new business plan that would need N$4.1 billion, while the fourth is the total closure of the airline - the option recommended by Schlettwein.
Liquidation
“This scenario assumes liquidation of Air Namibia. The government liability of approximately N$2.5 billion under the remaining government guarantee for the lease agreement of the A330s will stand,” the cabinet document said.
“The scenario is financially the most predictable [N$2.5 billion worst case] and therefore the preferred option,” the document said.
Jooste says he will hold meetings with the ministries of finance and transport to reflect on the new business plan and to chart a way forward for the airline in the coming days.
A N$193 million business plan was recently submitted by the board for the resumption of the airline's post-lockdown operations.
The airline has resumed flights domestically and to South Africa, utilising its Embraer 135 regional jets.
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