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Other Articles from The Villager

Air Namibia bleeding N$627m for grounded planes

Mon, 7 July 2014 02:12
by Tiri Masawi and Linekela Halwoodi
News

 

Air Namibia has lost about US$27m (N$270m) in leasing and maintenance fees and an additional US$40m (Approximately N$400m) depositors fees for a period of between three to 12 months for planes that they are not using, The Villager can reveal.
This comes after the airline failed to acquire an Aircraft Technical Record (ATR) for the four airlines that they are leasing without using.
The state owned airliner is leasing two planes which are grounded in Europe because their lease license expired while it also has two more A340 airliners owned by the government and two A330 airliners which were acquired to replace the ageing fleet.
Investigations show that Air Namibia’s first lease agreement expired on 30 April 2013 before being extended by nine months while the other lease agreement expired on June 2013 and was also renewed for nine months.
The Villager can also reveal that the Airline is sitting with same aeroplanes without a valid lease agreement and are paying through the nose until that situation is remedied.
A breakdown of the payments shows that Air Namibia is paying US$530 000 (Approximately N$5.3m) each for two planes and an additional US$2m for the other two planes at a rate of US$1m(Approximately N$11m) each per month for the past nine months.
The Airline also forked out an astounding US$6.5m (Approximately N$65m) to the leasing company authorised by the Acting General Manager and Chief Operations Officer Rene Gsponer a Swiss National given the reins by the Air Namibia Board to steer the company’s turnaround.
The airline is also caught in a predicament because the board chairperson extended the engagement with Luftansa by 36 months but could not get a sovereign guarantee from the state and the financier RMB bank of South Africa bailed out of the engagement with the Airliner.
Facts are that while the airliner would have benefited with a nine months engagement Luftansa carried over the old agreement without amendments taking into consideration that the airliner now had new planes. This resulted in the airliner losing more money and failing to access a discount that was initially negotiated.
The airline also has the latest A330 airliners that are being leased from Intrepid Aviation. Ironically the two leased 319 airliners are the cause of Air Namibia’s financial troubles as they are being grounded elsewhere in Europe and are also forcing the state owned company to continue paying leasing fees until they are returned to the owner.
Documents at hand also show that Air Namibia sourced the services of a consultant company to facilitate management transition and that as well did not come at a cheap cost.
The Airline however failed to do that in time and has been liable to paying leasing and maintenance fees for planes that they are not using.
Air Namibia finally contracted Luftansa Techniques a German company to do their management transition. In the aviation industry, when a lease agreement for an airline expires the same airline is expected to contract a technical company to certify that the planes are still fit for usage before they are given back to the owners.

Board room politicking
The national airliner last week announced that they have managed to renew their Air Operator Certificate and Operations Specifications from the Directorate of Civil Aviation (DCA). However what the airliner did not reveal is that the certificate from (DCA) was also based on the experience of the suspended General Manager Operations (Sheelongo).
Documents at hand from the DCA also show that the certificate was issued based on the skills of eight senior managers. These are Accountable Manager/Managing Director, Gsponer, General Manager Technical and Operations, Sheelongo (suspended), Senior Manager Quality Safety and Security, Larry Makanza (Zimbabwean), Senior Manager Aircraft Maintenance and Engineering, Francis Pwapwa (Zimbabwean), Manager Safety Captain Marco Konings(Namibian), Manager Training Captain Ray Sheikham (Arab) and  Ground Operations Noks Katjiuongua (Namibian and suspended).
The airline has also not revealed that DCA does not dictate to the Airlines to employ certain individuals but works on recommendations.
The Board has also not revealed that the certificate from DCA is lapsing on 30 September 2014 and will not create ample time for the airline to clear outstanding issues concerning their leasing agreements.
This will see Air Namibia continuing to fork out exorbitant amounts of money in leasing and maintenance fees for planes that they are not using.
Documents at hand also show that while the Airline’s Board of Directors revealed that Sheelongo was suspended for general insubordination, reality is that he did not concur with the Board Chairperson Harold Schmidt signing a 36 months with German company Luftansa Technique for their services. While Sheelongo had negotiated for a nine months assessment with the same company on a nine month period for two older planes his boss agreed to renew the same contract on new planes.
Sheelongo also fell victim for asking why the same German Company has failed to implemented a 20% discount he negotiated before the Board Chairperson negotiated for a 36 months contract. The contract between Luftansa Technique is also in The Villager’s hands.

Local skills development
Although the DCA certificate comes as a result of experience of the management recommended by the airliner, Air Namibia currently has four out of eight foreign senior managers but there are clear cut rules on who their local understudies are.

Contempt of Court
The airline is also in contempt of Court following a deliberate decision by the both the management and Board of Directors to defer the reinstatement of GM Operations, Sheelongo after a Labour Court ruling.
The labour court ruled that Sheelongo should be reinstated with full benefits he lost during his suspension tenure. However there is no movement on the board and management as Sheelongo has made it clear that he will not be comfortable reporting to the Acting GM.

Power struggles
Information from the high echelons of Air Namibia also reveal that the acting GM is contemplating a retrenchment as part of his way forward in helping the Airline. There is also a cloud of secrecy over the current GM’s salary since he is now doubling up roles.
According to documents at hand Air Namibia top boss is expected to go home with N$98 000 per month but the acting Swiss boss and the Board of Directors have been mum on how much was offered to Gsponer who first came to Air Namibia as a consultant recommended by International Airline Transport Association (IATA).

Lack of accountability
The Air Namibia Board is also reluctant to release a damaging Deloitte Forensic audit on the operations of the company which was released recently. The management of the company are constantly kept in the dark over the findings of the audit which is also vital for the company’s future operations and plans. The Villager also made frantic efforts to get in touch with the line Minister to secure Government position on the airline but could not be successful as his phone went unanswered. Meanwhile the Board Chairperson of the Airline Haroldt Schmidt failed to respond to written questions despite promising to attend to the inquiry.