N$240m bailout for AirNam

GOVERNMENT yesterday announced yet another financial bailout for the perpetually cash-strapped national carrier Air Namibia.

Information Minister Netumbo Nandi-Ndaitwah told a press briefing in Windhoek that a special Cabinet meeting on Monday had decided to provide a bank guarantee of N$240 million. She said this would enable the carrier to “secure funding from financial institutions for the remaining part of the (financial) year”.Air Namibia has accumulated losses of about N$860 million over the past five years, while Government has pumped approximately N$1,9 billion into the ailing airline since the start of the year 2000.The Office of the Auditor General has been instructed to perform an audit of Air Namibia’s operations, the Information Minister also announced yesterday.”This is to determine the efficiency of expenditure at Air Namibia and identify areas where costs could be saved and verify financial requirements for the company up to March 2007,” she said.”Air Namibia has to compete against other international airlines and the fuel prices recently increased significantly,” the Minister justified Government’s latest bailout.A team of three seasoned airline experts from Europe are expected to arrive in Namibia on October 16 to conduct an in-depth study of Air Namibia over two months, and to propose strategic options for Cabinet to decide on the future of the carrier, The Namibian has learnt.It is not the first time that external experts have been called in to rescue Air Namibia.But this time would be different, an official in the Windhoek office of the European Commission, Alan Joaris, said.The EC is financing the consultancy of the three experts.”They are Level 1 experts with at least 15 years of experience,” Joaris told this newspaper.Asked what the services of the three experts would cost, Joaris would only say: “A substantial amount.”Asked whether the experts might propose to Cabinet that Air Namibia should be scaled down to a local and regional airline, like Botswana’s national carrier, Joaris said this might possibly be one of various suggestions put on the table once the study was completed in December.Attempts to obtain comment from Air Namibia yesterday were unsuccessful.The company’s corporate communications manager, Ellison Hijarunguru, offered to respond to written questions yesterday, but he did not succeed because of the late arrival of an inbound Air Namibia flight.”We have to handle all the problems caused by delayed arrivals and might only respond later,” an official in the communications department said later yesterday afternoon.Frequent flyer dollars The millions allocated over the years: N$153 million: 2006-2007 * N$116 million: 2005-2006 * N$366 million: 2004-2005 * N$400 million: 2003-2004 * N$325 million: 2002-2003 * N$296 million: 2001-2002 * Plus the latest N$240 million Total: N$1,89 billionShe said this would enable the carrier to “secure funding from financial institutions for the remaining part of the (financial) year”.Air Namibia has accumulated losses of about N$860 million over the past five years, while Government has pumped approximately N$1,9 billion into the ailing airline since the start of the year 2000. The Office of the Auditor General has been instructed to perform an audit of Air Namibia’s operations, the Information Minister also announced yesterday.”This is to determine the efficiency of expenditure at Air Namibia and identify areas where costs could be saved and verify financial requirements for the company up to March 2007,” she said.”Air Namibia has to compete against other international airlines and the fuel prices recently increased significantly,” the Minister justified Government’s latest bailout.A team of three seasoned airline experts from Europe are expected to arrive in Namibia on October 16 to conduct an in-depth study of Air Namibia over two months, and to propose strategic options for Cabinet to decide on the future of the carrier, The Namibian has learnt.It is not the first time that external experts have been called in to rescue Air Namibia.But this time would be different, an official in the Windhoek office of the European Commission, Alan Joaris, said.The EC is financing the consultancy of the three experts.”They are Level 1 experts with at least 15 years of experience,” Joaris told this newspaper.Asked what the services of the three experts would cost, Joaris would only say: “A substantial amount.”Asked whether the experts might propose to Cabinet that Air Namibia should be scaled down to a local and regional airline, like Botswana’s national carrier, Joaris said this might possibly be one of various suggestions put on the table once the study was completed in December.Attempts to obtain comment from Air Namibia yesterday were unsuccessful.The company’s corporate communications manager, Ellison Hijarunguru, offered to respond to written questions yesterday, but he did not succeed because of the late arrival of an inbound Air Namibia flight.”We have to handle all the problems caused by delayed arrivals and might only respond later,” an official in the communications department said later yesterday afternoon.Frequent flyer dollars The millions allocated over the years: N$153 million: 2006-2007 * N$116 million: 2005-2006 * N$366 million: 2004-2005 * N$400 million: 2003-2004 * N$325 million: 2002-2003 * N$296 million: 2001-2002 * Plus the latest N$240 million Total: N$1,89 billion