11 Jun 2019 19:40pm
WINDHOEK, 11 JUN (NAMPA) - Air Namibia is not commercially viable in its current form, Minister of Public Enterprises, Leon Jooste said Tuesday.
Addressing a media briefing in Windhoek, Jooste said the national airline has not made a profit since its inception in 1946.
He noted that the Cabinet Committee on Overall Policies and Priorities has discussed the feasibility and possible liquidation of the national airline.
During the discussion, the committee discussed Air Namibia's viability and looked at a realistic snapshot of the national airline in its current form, as well as the current levels of debt attached to it and the cost of transforming it into a feasible airline.
The option of liquidation was also costed, Jooste said.
He further noted that there was a high level of debt between Air Namibia and the Namibia Airports Company, adding that Government would act in the best interest of both entities without giving preferential treatment to either one.
Jooste further indicated that Government would assist Air Namibia with its unpaid debt, amongst others because the airline carries the national flag.
Air Namibia has suspended flights between Windhoek and Luanda and several daily flights to Johannesburg and Cape Town after three of its Airbus A319 aircraft were seized in South Africa and Cyprus due to unpaid debt.
The airline was unable to meet these financial obligations due to a court battle in Belgium with Belgian airline, Challenge Air. As a result, the national airline's accounts in European banks have been frozen.
We have allocated funding to fulfil all of those requirements (unpaid debts). The aircrafts should become operational very soon. It is a concern for us at the moment because they are losing revenue on three of the four A319 Airbuses, which is a big gap in their revenue stream, Jooste said.