The slump in global oil prices has severely impacted the petro-dependent Angolan economy with state-backed national carrier TAAG Angola Airlines (DT, Luanda) now facing the "greatest financial crisis in its history,” Chief Executive Officer (CEO) Peter Hill has said.

The Lusa newswire says Hill made the disclosure in a presentation made to the board of directors last week. During the meeting, the newly appointed CEO said the airline's owner, the Angolan government, could no longer absorb the airline's losses in the face of dwindling revenue from its oil exports.

"With falling revenues in both passenger and cargo operations the challenge is becoming greater as each month passes," the presentation notes said. "Given the current economic situation of the country, the government is not able to provide sufficient support to cover our liquidity needs today."

In October, Angolan Vice President Manuel Vicente announced public spending would be cut by 53% to reduce strain on the fiscus which sources more than two-thirds of its inflows from the petroleum sector.

According to Hill's strategy, TAAG will have to implement painful cuts across the board with employees of all ranks likely to only receive basic pay over the next two months.

The CEO added that a due diligence of TAAG, carried out prior to his arrival, had shown gross inefficiencies throughout the airline noting in particular an overly-stocked warehouse containing duplicate equipment. An audit of the airline's books also revealed that USD9 million had been embezzled during the tenure of the carrier's previous board while eighty ghost pilots were weeded out of the pilot corps pay-roll.

"There will be no return to the old indifferent performance of the past; cheating the company, misappropriation of company funds and equipment, etc," he warned adding that the company's entire attitude and business culture would need to be changed.

Hill is one of five executives seconded to TAAG's board as part of a ten year Management Concession Agreement signed with Emirates (EK, Dubai Int'l) late last year.

Under the agreement, of TAAG's nine-member management board, Emirates appoints the CEO and four executive directors - the CAOA, the CCO, the CFO, and the COO - while the Angolan government appoints a deputy CEO and non-executive directors.

With TAAG having posted a loss of USD99 million for its latest financial year, the Emirates team has set the Angolan carrier the goal of boosting annual revenues from the current USD700 million to USD2.3 billion while generating a profit of USD100 million all by 2019.

As such, TAAG's five-year plan entails an increase in the fleet from its current fourteen aircraft (three B737-200Advs, five B737-700(M)s, three B777-200(ER)s, and three B777-300(ER)s) to twenty-one through the addition of more B777-300(ER)s and B737-700s while expanding its route network to encompass more destinations in Africa and Europe (Paris CDG and London Heathrow). The launch of flights to Houston Intc'l in the United States is also on the cards.