We need our national airline
07 October 2020 | Opinion
Air Namibia is sometimes a source of derision. A national outcry ensues every time new budget demands are made to the 'shareholder' (us), and with an endless queue of 'acting' CEOs, as well as the recent resignations of the chief financial officer and corporate communications manager, plus staff threatening to strike over a proposed 50% salary cut, increased calls are made for the airline to either be privatised or to simply closed down.
However, the Covid-19 crisis has underlined how exposed we are as a nation.
Whereas, a year ago, we had a myriad of options for regional travel (SAA, SA Express, BA/Comair, Airlink, Air Namibia, Westair), now only two of those options are left – Airlink and Westair.
And both come with strings attached. Airlink, for instance, will fly you to Johannesburg – but only from Walvis Bay. Similarly, they can fly you to Cape Town, but only from Windhoek! And Westair's extraordinary fares seem unrelated to what passengers can afford. Their quote for a return flight from Walvis Bay to Cape Town (departing 7/11/20, returning 26/12/20 ) is a staggering N$10 500.
Comair/BA have now de listed from the JSE and are planning to fly again only in December this year.
SAA are now essentially closed while the administrators seek the more than R10 billion required to resuscitate that airline, and SA Express were placed in provisional liquidation in April this year.
There could be hope on the horizon, of course, with Airlink applying for slots for flights from Windhoek to Johannesburg, and the budget South African carrier, FlySafair, promising to introduce three flights a week from Johannesburg to Windhoek.
But our vulnerabilities as a nation have been exposed. Relying on foreign airlines to service these important routes is, in times of emergency, perilous. It leaves us exposed, without vital air links for both passengers and freight to our Southern African neighbours.
So we need, as a nation, to put our collective energy and skills into working out a plan for Air Namibia.
A plan that will not only revive the airline, but put it on the profitable footing it can be. Models can be found just over the border. The private airline, FlySafair, for instance, is now the busiest in South Africa, servicing all major centres at relatively low cost. Their basic fare is R917 from Cape Town to Johannesburg – flying a similar distance as the route from Windhoek to Johannesburg. How do they do it?
Firstly, their administrative staff is trimmed down to the minimum. The bulk of their operations (booking, payment, refunds) are done (as with Air Namibia) online.
Secondly, they fly the same aircraft throughout their fleet (Boeing 737), and have done so since the airline started operations.
By comparison Air Namibia's ragtag assembly of not only aircraft types but aircraft manufacturers over the years (Boeing, McDonald Douglas, Airbus, Fokker, Embraer, CASA, Beechcraft, etc.) must be crippling in terms of both maintenance and crew training.
Thirdly, they operate on a 'zero cost' basis. Their fares include no meals and no baggage (except carry-on items), and reward passengers who book well beforehand and are willing to travel at inconvenient hours (their cheaper flights take off at 07:00 – a later departure is more expensive).
The plan to revive Air Namibia, and put it on a profitable footing, should therefore incorporate these elements. Firstly, a N$225 million shareholder investment would not only settle all existing debts, but allow the airline, for the first time, to purchase their aircraft instead of leasing them.
Two Embraer EJ135 aircraft could be purchased through those government loans, and used for internal routes.
Those routes (Windhoek to Ondangwa/Rundu, Windhoek to Katima Mulilo) would be centralised at our main airport – Hosea Kutako International Airport.
This would allow regional and international travellers to easily transfer from the international to domestic terminal for their local connections.
It would also, of course, considerably reduce the costs Air Namibia currently incur in having two Windhoek bases (Hosea Kutako and Eros) from which to operate.
The two A319 aircraft would continue to operate on two regional routes.
Windhoek - Johannesburg (from where passengers could transfer to Zambia, Zimbabwe, Ghana, Botswana, etc.) and Windhoek - Walvis Bay - Cape Town (thus also servicing the domestic leg from Windhoek to Walvis Bay).
Administration staff would be rationalised and decentralised, and the expensive offices in the city and elsewhere closed down.
Bookings, queries, refunds, etc. could be done either online (Air Namibia already has an established online operation) or through travel agents. Fares would be based on zero options, meaning no meals, alcohol, or baggage. Those services, if the passenger required, would come at extra cost. Also, ticket prices would fluctuate according to demand. The more passengers book for a flight and the closer it gets to departure, the higher the fare.
An article in New Era (30 September, 2020) revealed the costs that Air Namibia are currently facing.
They include a (reduced) rate of N$2.6 million a month to lease each of the two A319 aircraft, fuel costs (the article suggested these could also be reduced by up to N$2 per litre), costs for insurance, maintenance, airport fees, IATA fees (the international airline body), crew training costs, airport handling charges and the all-important technical maintenance fees. Plus, of course, salaries for the flight crew and cabin crew to operate each flight.
It mounts up and seems, at first glance, a scary figure. Per month, total operating costs could be as much as N$8 million for each of the A319 aircraft, and N$2 million for each of the Embraer EJ135 aircraft.
However, if one works on an income basis, and analysing what passengers are currently paying for their flights, the revenue from operating one daily flight to Cape Town (seven flights a week), with passengers paying an average of N$5 000 each for their return fare, and business class passengers paying N$7 000 return, should be in excess of N$17 million per month. And this assumes the plane is operating at only 70% capacity, and excludes revenue generated from other sources, such as freight. The more popular Johannesburg flight could operate twice a day, generating an income of more than N$32 million per month.
Expenses – N$8 million. Revenue – N$32 million.
It would require strong leadership and experienced management, but a respected and established national airline, serving Namibian routes that are in such high demand, and with most competition decimated by the current crisis, should be making a huge profit, not a loss. It should not be a drain on our national finances, but a source of revenue and pride.
* Robin Tyson is a media consultant based at Swakopmund.