Air Namibia battles for survival

Windhoek- Namibia (PANA) -- Even in advanced countries such as the US and Britain, airline business has been and is still unpredictable.
Stiff competition and high operational costs have forced mergers and partnerships of once reputable airlines such as British Caledonian and British Airways several years ago.
In the US a number of airline companies have had to close shop due to unforeseen market situations in the skies of business.
The story has not been different in Africa, either.
Small national airlines such as the Zambia Airways have had to disband some eight years ago due to unending losses.
The reputable East African Airways, once part of the umbilical cord of three East African countries of Uganda, Kenya and Tanzania, no longer flies over the snows of Kilimanjaro for nearly three decades now.
Air Afrique, the joint air pride of West African countries, has been plagued with poor finances and mismanagement, unable to fly on time anywhere.
In other countries where small national airlines have survived, governments have had to pump in colossal sums from public coffers in what some leaders refer to as "bottomless pits" just for the sheer pride of having a national flag carrier.
The current sad story of Air Namibia, founded hardly 11 years ago, is therefore no big surprise.
Prime Minister Hage Geingob warned in a television talk show last week that Air Namibia would be closed down "if they continued making losses.
" He said the government, which owned the airline, would take "drastic action" because the state could not continue to "throw money in a bottomless pit.
" His statement followed the latest development in the airline in which 12 senior managers were retrenched from the company end of June in what has been described as a "major shake-up" to transform the airline from a loss-making and debt-ridden entity into a profit-making one.
The airline parastatal believes that the action was a significant cost-saving measure that will bring in savings of 1.
2 million US dollars per annum.
The usual problems of airline company mismanagement and top- heavy structure have not left Air Namibia scot-free.
Airline schedule delays or/and cancellations due to technical faults to its sole intercontinental Boeing 747 aircraft, and unnecessary over-bookings resulting in several stranded passengers have been some of its nagging problems.
Accusations of mismanagement and fraud have not escaped the airline, either.
A major audit discovery recently by auditors Price and Waterhouse unearthed a fraud case in the cargo department amounting to 2.
5 million US dollars.
This and several other discrepancies resulted into staggering losses and airline debts amounting to 29 million US dollars.
Its over-bloated highly remunerated top-heavy structure has gobbled over 30 percent of the airline company's total annual wage bill.
The Malaysian-recruited Managing Director, Jaafar bin Ahmad, is said to be pocketing over 12,000 US dollars per month while ordinary senior managers are in receipt of not less than 4,000 dollars monthly.
The 12 sacked managers have petitioned the government, including the head of state, to appoint a committee of inquiry to probe the loss-making airline, arguing that it was unfair to target them for retrenchment while leaving the chief executive who should take the flack of the ills of the airline.
They alleged that bin Ahmad has been responsible for the losses, including the fraud in the cargo section of which he was well aware.
The ex-managers also suggested that the commission should further investigate the company's purchase of the Boeing 747-400 Combi, the sale of Boeing 737 to SAFAIR and the lease of two Boeings 737s, a contract with Ugandan airline, "whilst Namibia and Uganda opposed each other in the Democratic Republic of Congo conflict.
" The National Union of Namibia Workers have fully-backed the ex-managers, demanding that bin Ahmad's contract be terminated as he could not be exonerated from the mess in the airline.
However, the airline's board of directors, which has taken responsibility for the retrenchments, have said that the managing director must be given the opportunity to reshape the financially scarred company since the losses were there long before he was recruited.
The board chairman, Bank of Namibia Governor Tom Alweendo, said there was no evidence of improper conduct on the part of the chief executive.
Meanwhile, the government has agreed to inject in a cash bail out of 47 million US dollars to rejuvenate the airline.
It believes there was need for Air Namibia to regain client confidence and relive itself of the current pressure of debt servicing, credit worthiness and the ability to pay back to service providers.
Whether the recent action to retrench 12 senior managers, and the latest government pledged grant will rekindle the airline into a viable organisation, remains to be seen.
A number of airline experts, however, doubt if these measure will bring any miracles.
The premier believes that there was a need for a commission of inquiry, while other sources in the cabinet are of the opinion that there was need to dismiss the entire management and start afresh.
But it will come as no bolt from the blue if sooner or later Air Namibia will follow the footsteps of Zambia, East African Airways and British Caledonian.

16 july 2001 14:01:00




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