The Transportation Commission of Namibia has suspended Air Namibia's Scheduled Air Services Licence, citing the carrier's finances and doubts it can “provide a safe, satisfactory, and reliable air service,” The Namibian newspaper reported quoting a letter to acting CEO Elia Erastus from commission chairwoman Eldorette Harmse.
She said that the licence would be suspended from 2359L on July 8. The cash-strapped state-owned flag carrier will be given until July 22 to present “evidence of having obtained funding to meet the requirements of the Air Services Acts,” the letter said.
Its licence to operate non-scheduled services will remain valid for the duration of this period to allow it to undertake evacuation and repatriation flights.
Air Namibia needs NAD7 billion Namibian dollars (USD410 million) to survive the current financial year, a sum that includes outstanding debts and leasing payments exceeding NAD5 billion (USD293 million), the newspaper reported last week. Presenting these figures to the country's parliament, finance minister Iipumbu Shiimi said that no decision had been taken to liquidate the airline, as different options to restructure it were being considered.
However, implementing a new business plan is currently unaffordable, he added, as resources are needed for other priorities in Namibia such as health, education, housing, and sanitation as the nation confronts the Covid-19 pandemic.
The Cabinet Committee on the Treasury (CCT), which Shiimi chairs, has been assessing the various restructuring options and consulted the airline's board and union representatives to get their input.
“The CCT fully recognises the importance of having a national airline, and therefore it is looking at ways of finding a sustainable and affordable model for the national airline,” he said. “These consultations are ongoing, and once concluded, a final decision will be made.”
Only options that are in the best interest of employees, the airline, and the country will be considered, the minister stressed.
As previously reported, Namibian President Hage Geingob commented after his state of the nation address on June 5 that Air Namibia could be liquidated as it was failing to make a profit and needed constant government bailouts.
“It must be restructured, and if liquidation is the thing, we must do that,” he said.
Air Namibia employs about 780 people. In late June, The Namibian reported that the Cabinet had asked for a detailed financial breakdown for maintaining it or shutting it down.
Air Namibia was refused a NAD2 billion (USD119 million) bailout last October, but in December the state partially relented, providing a NAD578 million (USD34 million) loan guarantee. According to Namibia’s New Era, it received NAD8 billion (USD477 million) from the state between 1999 and 2019. A budget of NAD984.6 million (USD58 million) was allocated to the company for the fiscal year ending March 31, 2021.
The airline currently operates three A319-100s, two A330-200s, and four EMB-135ERs, the ch-aviation fleets module shows. Since halting operations for about two months, it had resumed a number of domestic routes using two of the E135s, from Windhoek Eros to Ondangwa, Luderitz, Mpacha, Rundu, and Walvis Bay, and between Oranjemund and Luderitz, according to the ch-aviation capacities module.
