Africa

Namibia: A Future Up in the Air

Almost every five years, Air Namibia has been repositioning itself, with new strategic plans aimed at revamping the national airline and turning it into a profitable enterprise. The fact of the matter is that Air Namibia has in the past committed many errors in judgement, especially when it comes to profitable route selection.

Industry experts have often alluded that some of these routes appeared to have been purely politically motivated instead of focusing on generating the much-needed revenue. This is evident from the fact that 15 out of the 19 routes Air Namibia was operating in 2019 were unprofitable, among others, due to high structural and operating costs.

The highest loss-making route was the Frankfurt one, which incurred major losses due to high fixed costs and underutilisation. However, attempts to resuscitate the beleaguered airline have often ended in blame shifting and unrealised business targets. This has resulted in N$8.4 billion taxpayers’ money being used to bail out the airline over the last ten years.

Air Namibia’s creditors have also been circling around the cash-strapped airline for years, while service providers have been seeking millions for unpaid services, which have been mostly attributed to historical debt.

There have been proposals, among others, to voluntarily close down the airline and negotiate exit lease agreements and transfer the airline to the public enterprises’ ministry. A new business plan that would need N$4.1 billion was also recommended in the past, while another offer was to liquidate the airline with government assuming liability of about N$2.5 billion. Not any of these worked out.