Privatisation within five years could bail out ailing Air Namibia

AIR NAMIBIA may be bailed out of its turbulent financial situation by plans drawn up between Namibia's finance minister Nangolo Mbumba and the airline's c.e.o. Jaafar bin Ahmed.
The airline has embarked on a restructuring process which is aimed at privatisation within five years, says Ahmed. This will reduce the government's 100% stake to around 30%, he says.
A recapitalisation plan by raising the airline's long-term bond is the first major step towards giving it a kick-start into the future. Air Namibia was run as a part of the parastatal Trans-Namib until the end of March, but is now a stand-alone entity in the government's network.
Although the government will remain the airline's sole shareholder for the time being, shareholding will be restructured towards the major privatisation, says Ahmed.
Steering it to regain stability won't be an easy process, as Air Namibia is immersed in financial and operational problems, he says. The continued losses, currently around R77million, are no longer sustainable. But there has been an overwhelming response to the voluntary retrenchment offer because of the attractive packages being offered.
This, in itself, has produced problems in that some employees who have applied for the packages, such as pilots and other topline personnel, have had to be turned down as they are considered essential service persons.
The airline,' says Mbumba, has been getting into difficult weather financially and operationally, and there is an urgent need to get it back on its feet.
The far-reaching cost-cutting process, which he announced, includes the retrenchment of up to 150 of the staff total of 550. But there are no plans to stagnate. The airline has now added a new Boeing 747-400 combi to its fleet, purchased through financing from the American Export and Import Bank.