MOST of the N$366 million that Government plans to channel to Air Namibia in the coming financial year will be used to service and repay the national airline’s debts, its Board Chairman said yesterday.
While Air Namibia is meeting its financial obligations with the help of Government, the current management and Board have been able to steer clear of adding to the airline’s debts over the past two years, and have succeeded in increasing the company’s income and passenger numbers, the Chairman of the airline’s Board, Vekuii Rukoro, said in a press release yesterday. Rukoro expressed Air Namibia’s appreciation to Government for its “continued support of the national airline during the restructuring process”.As part of the process, Government is helping the company by guaranteeing the debt that Air Namibia accumulated under its previous managements during 1999 and 2000, to enable the airline’s management to focus on delivering a superior product to the flying public and people wishing to travel to Namibia, according to Rukoro.Air Namibia has proven to be a major drain on State resources over the past three years.Since 1999 Government has channelled over N$1,4 billion to the airline to keep it in business.Major transfers of money to Air Namibia started from 2001, when successive financial years saw amounts of N$296 million, N$325 million and N$400 million respectively being poured into the airline.This week, the transfer of another N$366 million was proposed in the national budget for Government’s 2004-05 financial year.According to Rukoro 87,1 per cent (about N$318 million) of this latest amount will be used to service “legacy debt” and pay back debts that previous managements made in 1999.This includes making a final loan repayment on debt that was incurred in 1999 to buy two Fokker 28-3000 aircraft, and the ongoing servicing of the finance lease of the Boeing 747-400 Combi aircraft that Air Namibia acquired in October 1999, Rukoro stated.The remaining 12,9 per cent of the N$366 million, amounting to some N$47 million, will be used for the partial recapitalisation of “the new Air Namibia” as part of its turn-around process, Rukoro added.The full capitalisation required for the process is N$150 million, he added.According to the statement, Air Namibia’s restructuring process includes introducing more economical and better-configured wide-body aircraft on the airline’s international route, as well as expanding its international route to include London’s Gatwick Airport.Rukoro claimed that no new debt had been incurred over the past two years, and that growing revenue and passenger numbers indicated that the airline had been stabilised and was being positioned for a turnaround.In the 200-/04 financial year, he stated, Air Namibia’s income was N$18,6 million more in the period between April and December than in the same period the year before, while passenger numbers were 15,3 per cent higher over the same period.Sales on Air Namibia’s Frankfurt to Windhoek route increased by 50 per cent in January 2004, compared to the same month a year before, whereas a total increase of 17 per cent in sales from Frankfurt was achieved for the period from April last year to this January, compared to the period from April 2002 to January 2003, said Rukoro.Rukoro expressed Air Namibia’s appreciation to Government for its “continued support of the national airline during the restructuring process”.As part of the process, Government is helping the company by guaranteeing the debt that Air Namibia accumulated under its previous managements during 1999 and 2000, to enable the airline’s management to focus on delivering a superior product to the flying public and people wishing to travel to Namibia, according to Rukoro.Air Namibia has proven to be a major drain on State resources over the past three years.Since 1999 Government has channelled over N$1,4 billion to the airline to keep it in business.Major transfers of money to Air Namibia started from 2001, when successive financial years saw amounts of N$296 million, N$325 million and N$400 million respectively being poured into the airline.This week, the transfer of another N$366 million was proposed in the national budget for Government’s 2004-05 financial year.According to Rukoro 87,1 per cent (about N$318 million) of this latest amount will be used to service “legacy debt” and pay back debts that previous managements made in 1999.This includes making a final loan repayment on debt that was incurred in 1999 to buy two Fokker 28-3000 aircraft, and the ongoing servicing of the finance lease of the Boeing 747-400 Combi aircraft that Air Namibia acquired in October 1999, Rukoro stated.The remaining 12,9 per cent of the N$366 million, amounting to some N$47 million, will be used for the partial recapitalisation of “the new Air Namibia” as part of its turn-around process, Rukoro added.The full capitalisation required for the process is N$150 million, he added.According to the statement, Air Namibia’s restructuring process includes introducing more economical and better-configured wide-body aircraft on the airline’s international route, as well as expanding its international route to include London’s Gatwick Airport.Rukoro claimed that no new debt had been incurred over the past two years, and that growing revenue and passenger numbers indicated that the airline had been stabilised and was being positioned for a turnaround.In the 200-/04 financial year, he stated, Air Namibia’s income was N$18,6 million more in the period between April and December than in the same period the year before, while passenger numbers were 15,3 per cent higher over the same period.Sales on Air Namibia’s Frankfurt to Windhoek route increased by 50 per cent in January 2004, compared to the same month a year before, whereas a total increase of 17 per cent in sales from Frankfurt was achieved for the period from April last year to this January, compared to the period from April 2002 to January 2003, said Rukoro.
