Air Namibia now plans to downsize its operations to be able to function effectively since its strategic plan has, thus far, failed to achieve the results it had initially intended to, managing director, Theo Namases, has revealed.
Namases told The Villager; “We need to effectively look into our current routes as they are not all profitable. We also need to relook the strategic plan that was done two years ago as some of the issues incorporated in it have actually lost their meaning. While we cannot consider the privatisation part because that is a shareholder’s decision, a definite need to cut down operations to manageable levels in the near future is more viable.”
Ironically, the same strategic plan that Namases puts into question is the same one that the company used to source financial support from the Government, arguing that it has (or had) potential to turn around its fortunes.
According to Namases, it has been difficult for the airline to maintain the current routes, because some do not seem viable, hence the need for it to rethink its strategy going forward.
“I should make it clear that if we had a smaller airline with minimum, efficient and profitable routes, then there would be a chance for things to be better but the problem is, the resources that we have now might not be enough to be spread along all our routes,” she added.
She also said, “We certainly hope the strike does not end up in us losing the required skills. What people miss is that as long as we do not have adequate resources to drive the airline, then there is no need to talk of growth or the future, because we are as good broke.”
Given its state of affairs, the company has been pushed to a back-foot, with its pilots lobbying for better salaries in line with other regional flights’ packages in the highly competitive industry. Incidentally, the pilots currently earn between N$400 000 and N$600 000 in basic salaries, depending on their ranks.
But Air Namibia, according to Namases, would have to part with close to N$10m in the near future if it is to meet the 10% salary increase demanded by its striking pilots.
Just recently, Air Namibia sought close to N$200m from the Government through the Ministry of Works and Transport to finance its operations as well as roll-in its planned restructuring exercise meant to bring financial sanity to the struggling parastatal.
Namases argued, the company, after recently launching routes to Ghana, Zimbabwe, Botswana and Zambia in a bid to improve its regional presence, now cannot afford the continued industrial action, which has seen it lose N$35m in potential revenue at a rate of N$5m a day.
“We are keeping faith in the ongoing negotiations with the striking employees. We do not have the money to meet their demands but we can meet them halfway. We are in a position to give the pilots a five percent increment back-dated to April but anything further than that could have serious effects to our balance sheet,” Namases stressed, adding, when the strike started on the 16th of this month, the airline had to cancel 14 flights.
The total number of cancelled flights [by the time of publication] had reached 50 as there has been no immediate solution to the industrial action.
According to Namases, the airline has had to abandon most of its flights, allowing South African Airways to transport most of the travelers within the Southern African Development Community (Sadc) while the other international airlines have had to be paid in negotiations to cover for the airline’s regular routes.