Air Namibia (Windhoek International) has been left to fend for itself after the Namibian government rejected its request for a NAD2 billion Namibian dollar (USD137 million) bailout.
Finance minister Calle Schlettwein told a midterm budget review breakfast in Windhoek on Wednesday, October 16, that disbursing more funds to the state-owned carrier would be a waste of resources at present time given the airline's lack of profitability and therefore, sustainability.
“If you look at Air Namibia, you have to realise that for the last 29 years there was not a single year where Air Namibia contributed to the state coffers; it has never made money,” he was quoted by The Observer newspaper. “If we give NAD2 billion this year, the same question will come to treasury next year, another NAD2 billion and maybe another NAD3 billion."
According to the minister, the requested recapitalisation will only go towards servicing the airline's debt and thus perpetuate a status-quo that is unsustainable.
“We are at a point where we have to crucially think; if we put in what they have asked us to put in, that is NAD2 billion, is that the best way to spend money to create jobs, to grow the economy? The answer is obviously no. So whatever we do, we are at a time we need to discuss a better option for the national carrier,” he added.
Air Namibia spokesman Paul Nakawa told The Observer in a statement that the government's decision had forced the airline to take drastic measures to ensure it remains operational.
“Austerity measures are being put in place, and that is the way forward,” he said. “Our business continues uninterrupted despite the challenging times which require that we evaluate how we conduct our business at every level to ensure we remain focused and align to the current environment. Air Namibia will continue to operate and deliver on its mandate.”
Air Namibia has been beset by funding problems over the past several months, with its aircraft having been impounded at several airports across the globe citing non-payment of dues.
On Wednesday, October 16, the Airports Company South Africa (ACSA) banned the airline from Johannesburg O.R. Tambo and Cape Town International airport after Air Namibia failed to settle its account. The embargo was lifted shortly after a partial payment was made.
In September, Air Namibia asked the Ministry of Works and Transport for “urgent shareholder capitalisation” of NAD1.6 billion (USD109.4 million) to be paid in two tranches of NAD800 million (USD54.7 million) each by August 31 and September 30. Among its most pressing debts is the settlement of a EUR25 million euro (USD29 million) claim levelled against Air Namibia by the bankruptcy estate of defunct Belgian carrier Challengair. Given its unwillingness to pay off the sum, Challengair's executors have repeatedly garnished Air Namibia's European bank accounts.
