Loss-making Air Namibia wants N$3b from government
The financially overwhelmed national carrier, Air Namibia has come out of the shell to tell the government that it needs funding of between N$2.5 billion to N$3 billion to jumpstart its profits after years of loss-making.
This was disclosed by the company’s general manager for commercial services, Xavier Masule yesterday when Air Namibia met government, represented by the standing committee on economics and public administration.
The committee wanted to know why the company was failing to make a profit in light of massive bail-outs.
Masule at first appeared reluctant to disclose the figure but only did so after a persistent grilling by the official opposition leader, McHenry Venaani.
Masule said the unfortunate fate to which Air Namibia has been tied to is that government has been paying monies that have been channelled to rental payments and other expenditure and not necessarily in expanding infrastructure.
Venaani nevertheless lambasted the carrier’s management for running a company that was suffering losses at a time when the tourism sector has been blooming.
Said Venaani, “The two things must speak to each other. That when you’re having more tourists coming to Namibia, Air Namibia should be making profits. The only route that is making a profit is the Ondangwa route, fair and well. But Frankfurt!”
“The input that you’re putting in the Frankfurt (route) and the return that we are getting, that you need to answer to me. If Lufthansa, for example, decides to come to Namibia, even if I give you the fleets and infrastructure that you want to be able to balance your balance sheet that is very weak, what will happen? Will Air Namibia still exist?”
Masule rebutted the politician with statistical data to the effect that the observed tourism boom did not in any way mean they had lost passengers.
He said, “Yes we might have lost 13% market share but what has happened is that over the last two years, the number of tourist arrivals in Namibia grew from one million to 1.4 million. It’s a 44% increase. If you average it on an annual basis, it’s an annual growth of 3%.”
“The market size grew; our market share came down, but the actual number of passengers we transported did not shrink. It only means we did not participate fully in the growth. We still transported 5% more passengers than the year before,” he argued.
He added that the new airlines also brought with them that growth in tourist numbers.
To that effect, Air Namibia acting managing director, Mandi Samson vehemently disputed the introduction of more outside airlines when the market was already small.
However, some members of the committee took offence at her point that the company needed to lay a solid foundation, and they queried how many decades should Air Namibia need to consider doing the same thing.
Others were as blatantly direct as to query whether the management thought they could survive given that government was financially constrained.
The issue of the many turnaround strategies that have been written now and then yet with no results also torched a storm in the meeting.
“I have been sitting here with Air Namibia. I’ve had three fundamental turnaround strategies that none of you have complied to. Turnaround strategy after turnaround strategy! Now you have a new turnaround strategy, and by 2021 you’ll disappear to another job,” Venaani weighed in.
Samson, however, said she understood herself to be more of a “baby-sitter-in-chief” who was trying to do the best she could.
“What we have tabled including the five pillars of the plan as dully approved by cabinet in June 2016 is an effort that I take full responsibility for,” she declared.
Samson assured the committee that they have only 14 weeks, which started clocking on the 6th of this month, to look at the plan regarding how Air Namibia could fix its challenges, the Frankfurt question being a major one.