Air Namibia now a flying albatross

AIR Namibia continues to drain State coffers – this year to the tune of N$153,4 million. This is nearly five times more than Government pledged to allocate to the airline in its Medium Term Expenditure Framework tabled in Parliament last year.

By the end of the next three-year budgetary period, the airline would have cost the State only a few dollars short of N$2 billion since 2000. During the 2005-06 financial year, the airline received N$116 million.Apart from the N$33 million Government pledged to give the airline last year to implement its turnaround strategy in 2006-07, it will get another N$80 million to lease, maintain and insure its aircraft and a further N$40 million to repay its loans and overdraft in this financial year.In December, Air Namibia took out loans of N$86 million from commercial banks to keep it flying.As has become customary, the struggling airline once again received special mention when the national Budget was tabled in the National Assembly yesterday.However, in less than a year, the remarks of Finance Minister Saara Kuugongelwa-Amadhila on the airline’s financial performance have changed dramatically.Yesterday she said the parastatal remained a concern to Government, as its financial situation continued to deteriorate.She however steered clear of mentioning exactly how much the State would allocate to the airline in the new financial year, despite the DTA’s Johan de Waal pressing her to provide the House with figures.Last year, Kuugongelwa-Amadhila said reform efforts at the airline were generating “positive results” and had reduced its operational losses significantly.At that time she also said that State budgetary transfers to the airline would be reduced over the coming years and gradually phased out.Yesterday, she was terse when it came to commenting on the airline.She said as a small operator, Government would like to see Air Namibia enter into strategic alliances to benefit from economies of scale.”I believe that Air Namibia has an important role to play, especially in the tourism market.But to realise that, the company needs to transform itself to be better able to face the challenges of the highly competitive industry in which it operates,” said Kuugongelwa-Amadhila.Instead of decreasing, as the Minister had earlier promised, State allocations to Air Namibia will in fact increase next year when it will again receive a further N$153,4 million (instead of the N$33 million projected last year) and N$120,4 million in 2008-09.During the 2005-06 financial year, the airline received N$116 million.Apart from the N$33 million Government pledged to give the airline last year to implement its turnaround strategy in 2006-07, it will get another N$80 million to lease, maintain and insure its aircraft and a further N$40 million to repay its loans and overdraft in this financial year. In December, Air Namibia took out loans of N$86 million from commercial banks to keep it flying.As has become customary, the struggling airline once again received special mention when the national Budget was tabled in the National Assembly yesterday.However, in less than a year, the remarks of Finance Minister Saara Kuugongelwa-Amadhila on the airline’s financial performance have changed dramatically.Yesterday she said the parastatal remained a concern to Government, as its financial situation continued to deteriorate.She however steered clear of mentioning exactly how much the State would allocate to the airline in the new financial year, despite the DTA’s Johan de Waal pressing her to provide the House with figures.Last year, Kuugongelwa-Amadhila said reform efforts at the airline were generating “positive results” and had reduced its operational losses significantly.At that time she also said that State budgetary transfers to the airline would be reduced over the coming years and gradually phased out.Yesterday, she was terse when it came to commenting on the airline.She said as a small operator, Government would like to see Air Namibia enter into strategic alliances to benefit from economies of scale.”I believe that Air Namibia has an important role to play, especially in the tourism market.But to realise that, the company needs to transform itself to be better able to face the challenges of the highly competitive industry in which it operates,” said Kuugongelwa-Amadhila.Instead of decreasing, as the Minister had earlier promised, State allocations to Air Namibia will in fact increase next year when it will again receive a further N$153,4 million (instead of the N$33 million projected last year) and N$120,4 million in 2008-09.