Minister defends Air Nam losses

FINANCE Minister Saara Kuugongelwa-Amadhila yesterday downplayed reports of financial turmoil at the national airline Air Namibia, telling the National Assembly that the airline has suffered operational losses since its inception.

However, she said the operational losses had decreased over the years. Financial support from State coffers to Air Namibia has already exceeded N$1 billion.Responding to queries from the opposition benches regarding the reported worsening financial status of the airline, Kuugongelwa-Amadhila said the reasons were “multiple”.The Finance Minister said Air Namibia’s revenue generation was affected by stiff competition in the airline industry for such a small operator and the appreciation of the South African rand and Namibia dollar.She also cited the upsurge in fuel prices as having dampened Air Namibia’s operating margins.”Of course we are aware that further improvement in operational efficiency at the airline, further promotion of the airline brand in the international market, and the establishment of strategic alliances with other partners could reduce the affects of these negative developments and improve the financial performance of the company, and the company continues to pursue efforts in this regard,” said Kuugongelwa-Amadhila.Operational losses at the airline dropped from N$195,8 million in the 2001-02 financial year, to N$149,4 million in 2003-04.However she warned that Government could not be expected to jump in to absorb operational losses.”We are all agreed that subsidies to parastatals have reached unsustainable levels already, and ways have to be found to deal with these issues without increasing budget subsidies and by extension the budget deficit, and we at the ministry continue to be engaged with the company and others affected by these developments to find solutions,” said Kuugongelwa-Amadhila.The Minister also responded to claims by the opposition that the management and board lacked the required skills to run the airline efficiently.She maintained that during the recruitment process, Managing Director Kosmas Egumbo had impressed the interview panel more than the former MD, Gernot Riedel.”Is it because the candidate who succeeded in the interview was previously disadvantaged and there is some sort of bias that he has to be, by virtue of that, unqualified and something has to be wrong with his appointment?” Kuugongelwa-Amadhila asked the Republican Party’s Henk Mudge.Mudge queried the resignation of former General Manager of Operations and Technical Services, André Compion, last month and the termination of Riedel’s contract at the end of the year.”If Mr Mudge preferred for Mr Compion to remain at Air Namibia, then he could have done well to advise him not to resign, rather than to try and blame Air Namibia for accepting his resignation,” Kuugongelwa-Amadhila said.Financial support from State coffers to Air Namibia has already exceeded N$1 billion.Responding to queries from the opposition benches regarding the reported worsening financial status of the airline, Kuugongelwa-Amadhila said the reasons were “multiple”.The Finance Minister said Air Namibia’s revenue generation was affected by stiff competition in the airline industry for such a small operator and the appreciation of the South African rand and Namibia dollar.She also cited the upsurge in fuel prices as having dampened Air Namibia’s operating margins.”Of course we are aware that further improvement in operational efficiency at the airline, further promotion of the airline brand in the international market, and the establishment of strategic alliances with other partners could reduce the affects of these negative developments and improve the financial performance of the company, and the company continues to pursue efforts in this regard,” said Kuugongelwa-Amadhila.Operational losses at the airline dropped from N$195,8 million in the 2001-02 financial year, to N$149,4 million in 2003-04.However she warned that Government could not be expected to jump in to absorb operational losses.”We are all agreed that subsidies to parastatals have reached unsustainable levels already, and ways have to be found to deal with these issues without increasing budget subsidies and by extension the budget deficit, and we at the ministry continue to be engaged with the company and others affected by these developments to find solutions,” said Kuugongelwa-Amadhila.The Minister also responded to claims by the opposition that the management and board lacked the required skills to run the airline efficiently.She maintained that during the recruitment process, Managing Director Kosmas Egumbo had impressed the interview panel more than the former MD, Gernot Riedel.”Is it because the candidate who succeeded in the interview was previously disadvantaged and there is some sort of bias that he has to be, by virtue of that, unqualified and something has to be wrong with his appointment?” Kuugongelwa-Amadhila asked the Republican Party’s Henk Mudge.Mudge queried the resignation of former General Manager of Operations and Technical Services, André Compion, last month and the termination of Riedel’s contract at the end of the year.”If Mr Mudge preferred for Mr Compion to remain at Air Namibia, then he could have done well to advise him not to resign, rather than to try and blame Air Namibia for accepting his resignation,” Kuugongelwa-Amadhila said.