Air Namibia (SW, Windhoek Int'l) has had another reprieve from liquidation after the Namibian High Court in Windhoek on October 29, 2020, postponed the case to December 1, 2020, on a legal technicality to allow the merits of the case to be heard, reports EagleFM.

The airline is opposing an application in which Anicet Baum, the Belgian liquidator of defunct Challengair (1I, Brussels National), seeks to have the cash-strapped national carrier liquidated, alleging it had failed to honour monthly instalments on a settlement of NAD400 million Namibian dollars (USD24.2 million) to Challengair. The settlement results from a longstanding dispute over Air Namibia's lease and maintenance of a B767-300(ER) from Challengair in 1998.

Meanwhile, the Association of South African Travel Agents (ASATA) informed its members that Air Namibia had been suspended from the IATA Settlement Systems (ISS) after it failed to pay outstanding amounts due in relation to Billing and Settlement Plan (BSP) and IATA Clearing House (ICH) settlements. ASATA had been informed according by Juan Antonio Rodriguez, IATA's Director Financial Distribution Services Operations.

Windhoek's Allgemeine Zeitung reported that Chief Executive Officer Theo Mberirua admitted the decision would affect Air Namibia but gave assurances that local flights would be unaffected and that the ban would only have a limited effect on regional flights. Mberirua explained the airline was experiencing challenges due to unflown liability. "We have deposited an amount with ISS which normally covers all accounts including refunds. But the COVID-19 pandemic has had a disastrous impact on us, as well as other international airlines. None of the airlines simply pay back - in fact, IATA initially advised us to issue vouchers for the future, but ultimately the liability increases inexorably as the travel industry remains paralyzed by the COVID-19 measures taken."

Meanwhile, The Namibian reports that Air Namibia acknowledged in a settlement agreement with Baum in December 2019, that it owed Challengair EUR18.2 million (USD21.4 million), which it undertook to repay in instalments until September 2021. To date, the airline had paid EUR8.2 million euros (USD9.6 million). However, several payments were not made in full, while another had been delayed. The Belgian liquidator claimed that Air Namibia had no means of honouring its debts and thus had sought the assistance of the courts to have the company wound up.

In a responding affidavit, Air Namibia Chief Executive Officer Theo Mberirua denied the airline was insolvent. He said the Namibian parliament had earmarked NAD984 million (USD59.9 million) in the current financial year for Air Namibia, of which the airline had only used NAD248 million (USD15.1 million). "Thus, the amount of money that has not yet been utilised by Air Namibia is about NAD736 million (USD44.8 million). This amount is sufficient to pay Air Namibia's debt claimed by the applicant," he said. Mberirua said the Namibian government had been paying the airline's debts when they became due.

He said the airline had arranged reviewed payment terms with certain creditors because of the COVID-19 crisis. "Air Namibia made a similar proposal to the applicant on March 25, 2020, for revised payment terms. Suffice that I record that the applicant did not respond to the said letter," he said.

Mberirua said the airline had requested the government to provide the amount sought by Baum along with a restart plan for the airline. In terms of the plan, Air Namibia had requested NAD56.9 million (USD3.4 million) to pay Challengair and other creditors.

"Air Namibia further requested an amount of NAD192.7 million (USD11.7 million) to start its operations. Of this amount, Challengair will be paid the outstanding monthly instalments set out in the settlement agreement," he said.