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Air Nam: MD, Board chairperson in tug of war

Mon, 18 March 2013 02:50
by Tirivangani Masawi

Minister of Works and Transport Erkki Nghimtina has said it will prove extremely difficult to turn around Air Namibia even if they are given money as long as management fails to be disciplined and follow the propositions of the Board.
His remarks come at a time when The Villager investigations uncovered a growing power struggle between managing director Theo Namases and the Board Chairperson, Haroldt Schmidt.
The tug of war between Namases and Schmidt is threatening to derail efforts by the Government to have the State enterprise improve its operations following treasury approval of a bailout of N$1.8b over the next Medium Term Expenditure Framework (MTEF).
Although the widening rift is still to hit the public forum, The Villager understands the top management of Air Namibia are not taking lightly the persistent push by the Schmidt board to cut cost at the airline as the cornerstone of improving operations.  
A document presented to the Government which The Villager has seen shows that the company’s two centres of power are pulling in different directions and find it difficult to find consensus on issues affecting the company.
Although Namases denies the clash has become personal, The Villager understands the board and IATA experts have been in a tangle for implementing an ambitious five year strategic plan which was sent to Cabinet, a plan the management of Air Namibia wants reviewed and considers it ‘over-ambitious’.
Nghimtina told The Villager that there seems to be lack of discipline on the management’s part adding that the management of the airline was used to operating with a rather lenient Board which never questioned their operations and this has to change.
“What I understand is that there is lack of discipline on the part of the management and they (management) seem to think that they cannot be questioned. What they miss is that the Board is elected by the Minister who is in turn elected by the President so in actual fact they must follow the Board’s resolutions and whenever they fail to do that they should explain.
“In fact, there has been this growing concern that I do not like the managing director and I want to tell that this is a lie. What I am concerned about and what the Board is concerned about is delivery which the management does not seem to understand,” Nghimtina said.
He added that he elected the Board to make sure the airline cuts its cost and make profit but that does not seem to be understood by the management.
“Some of the management (members) do not understand the aviation industry and they think they can continue doing things in the same way. There are even some who have even advocated that the Board do not understand the airline industry and should be dissolved.
“However, reality is that it will not be every time that the Board and Minister will be sympathetic to non-performers. What they should do is to make profit even if its one dollar profit everyone will be impressed,” he said.
Nghimtina said he demands that the management start following the propositions of the board going forward.
Schmidt told The Villager that the management of the airline somehow felt threatened after the new set up where decision making at the airline had to be made by the Board, management and members of the International Airline Transport Association (IATA).
“There have been several instances where recommendations from the Board have not been implemented by the management and there are also instances where management has frustrated implementation of the Board.
“In actual fact, this scenario ended up in dire financial constrains for the airline.
“However, the problem has slowed down but not completely eradicated. We have actually set up an audit to deal with the situation where management does not comply with recommendations and when that audit is completed we will take decisions that are necessary.
“I will actually be at liberty to name some of the instances where ill-discipline was practiced by the management but for the sake of continuity and giving the audit a chance I will not go that route,” Schmidt said.
According to Schmidt the clash between the Board and management has not been a personality clash but a lack of understanding on one hand adding that the best decision for the airline should be taken.
“Whatever is going on should not be for the best of individuals other than the best of individuals.