Boeing close to going

AIR NAMIBIA says it is on the brink of clinching a deal which would see it rid itself of its biggest single debt – the Boeing 747-400 Combi.

If all goes according to plan, the 747 could leave the national air carrier’s fleet by the end of June. Speaking from the Philippines on Wednesday, Air Namibia Managing Director Gernot Riedel was upbeat that this time around the airline would succeed in selling its flagship aircraft.He confirmed that a Memorandum of Understanding had been signed with a prospective buyer but, in terms of the agreement, could not name the party involved.”It’s going to be quite a surprise,” he said, adding that the buyer was “well known”.Riedel did, however, reveal that the deal had been entered into with an airline operator and not an airline.”It’s getting very close.It shows that we are making progress.It’s been on the table for a long time.We are hopeful that we have found the final solution,” he said.Within the next 10 days, he said, the deal should be sealed.Early last year, the airline failed to conclude a deal for Air Gabon to lease the plane which would have seen it cover the finance charges.Riedel dispelled reports that the plane would undergo modifications to meet the requirements of the buyer.He said the Boeing was anticipated to go through its three-monthly A-check at KLM, which currently services the aircraft, before it is handed over.During its last maintenance check in Amsterdam in March, the aircraft was fitted with a new bullet-proof cockpit door – a mandatory safety regulation in the aftermath of terrorist hijackings.Selling the jumbo jet, a controversial purchase made in 1999, is in line with a Cabinet-approved business plan for the airline aimed at revamping its operations to curtail costs.The Boeing jet has been at the centre of Air Namibia’s poor financial performance since it was purchased, which has seen Government bail out the company to the tune of N$1,4 billion to keep its aircraft in the sky.The company stands to receive another N$366 million through this year’s national Budget.Riedel said because of the confidentiality of the agreement at this stage, the price tag put on the plane could not be revealed.However, he said, it “was close to full coverage” of what is still owed – an amount believed to be in excess of N$700 million.The plane was bought for US$114 million (about N$707 million at the time), largely through a bank loan of US$99 million from the Export-Import Bank of the United States (Ex-Im Bank).Last year Government indicated that it would meet the financial shortfall of disposing of the Boeing and help the airline start afresh.Riedel, who was secretive about the countries he has been visiting over the past weeks when he spoke to The Namibian, said that his time abroad was also being spent on finding two suitable Airbus A340-300 aircraft to lease for the airline’s continental routes.One would be needed to take the place of the 747, which currently flies to Frankfurt four times a week; the other would be needed to re-introduce its London flight, which was initially slated for next month.However, Riedel said the airline had not yet concluded any deal on this front and that suitable replacement aircraft were difficult to find.Riedel is expected to attend the African Airlines’ Association conference in Nairobi, Kenya, before returning to Namibia next week.Air Namibia currently serves on the executive committee.Speaking from the Philippines on Wednesday, Air Namibia Managing Director Gernot Riedel was upbeat that this time around the airline would succeed in selling its flagship aircraft.He confirmed that a Memorandum of Understanding had been signed with a prospective buyer but, in terms of the agreement, could not name the party involved.”It’s going to be quite a surprise,” he said, adding that the buyer was “well known”.Riedel did, however, reveal that the deal had been entered into with an airline operator and not an airline.”It’s getting very close.It shows that we are making progress.It’s been on the table for a long time.We are hopeful that we have found the final solution,” he said.Within the next 10 days, he said, the deal should be sealed.Early last year, the airline failed to conclude a deal for Air Gabon to lease the plane which would have seen it cover the finance charges.Riedel dispelled reports that the plane would undergo modifications to meet the requirements of the buyer.He said the Boeing was anticipated to go through its three-monthly A-check at KLM, which currently services the aircraft, before it is handed over.During its last maintenance check in Amsterdam in March, the aircraft was fitted with a new bullet-proof cockpit door – a mandatory safety regulation in the aftermath of terrorist hijackings.Selling the jumbo jet, a controversial purchase made in 1999, is in line with a Cabinet-approved business plan for the airline aimed at revamping its operations to curtail costs.The Boeing jet has been at the centre of Air Namibia’s poor financial performance since it was purchased, which has seen Government bail out the company to the tune of N$1,4 billion to keep its aircraft in the sky.The company stands to receive another N$366 million through this year’s national Budget.Riedel said because of the confidentiality of the agreement at this stage, the price tag put on the plane could not be revealed.However, he said, it “was close to full coverage” of what is still owed – an amount believed to be in excess of N$700 million.The plane was bought for US$114 million (about N$707 million at the time), largely through a bank loan of US$99 million from the Export-Import Bank of the United States (Ex-Im Bank).Last year Government indicated that it would meet the financial shortfall of disposing of the Boeing and help the airline start afresh.Riedel, who was secretive about the countries he has been visiting over the past weeks when he spoke to The Namibian, said that his time abroad was also being spent on finding two suitable Airbus A340-300 aircraft to lease for the airline’s continental routes.One would be needed to take the place of the 747, which currently flies to Frankfurt four times a week; the other would be needed to re-introduce its London flight, which was initially slated for next month.However, Riedel said the airline had not yet concluded any deal on this front and that suitable replacement aircraft were difficult to find.Riedel is expected to attend the African Airlines’ Association conference in Nairobi, Kenya, before returning to Namibia next week.Air Namibia currently serves on the executive committee.