Rukoro quits Air Namibia, Criticises State House

AIR NAMIBIA’S Board Chairman Vekuii Rukoro, has quit, citing State House interference in commercial decisions.

Yesterday Rukoro told The Namibian that his resignation was a matter of “principle and honour”. Rukoro tendered his resignation to Finance Minister Saara Kuugongelwa-Amadhila on Friday, effective immediately.The former Attorney General accused State House of stalling plans to get rid of the embattled airline’s greatest debt – the Boeing Combi 747-400 – with less than a week left to finalise the sale to yet publicly undisclosed buyers.Despite a November Cabinet resolution, on advice from an independent, Government-appointed aviation expert that the Jumbo be sold, the President has apparently expressed reservations about the deal since negotiations reached an advanced stage two months ago.The Jumbo was scheduled to leave Air Namibia’s fleet by the end of June, following a memorandum of understanding signed with a buyer in May.But following a State House meeting of top Government officials, Air Namibia was instructed by the Finance Minister that it could not proceed with the deal until a replacement aircraft to operate the continental route had been found.”I felt that this interference was uncalled for.It is not something any self-respecting board of directors could live with,” said Rukoro.”The law expects directors to take responsibility for their decisions, but it is Government who is taking the decisions.”Approached for comment, Kuugongelwa-Amadhila confirmed that the sale of the Boeing had attracted State House’s attention, but she denied any interference.”I do not agree that there has been imposition or interference from any Government office.There has been interaction but not interference,” she told The Namibian.”There have been discussions involving a lot of different people within Government.State House has not gone out of its way to tell Air Namibia to do this or to do that.”Secretary to the President Ndeutala Angolo did not respond to messages left at her office.The Namibian understands that Air Namibia’s management met with President Sam Nujoma at State House yesterday to discuss the Boeing transaction further.Three weeks ago, Rukoro informed Kuugongelwa-Amadhila that he planned to give Air Namibia’s management the go-ahead to tie up the deal.But the very next day he was ordered to put a stop to the transaction.”Without the sale of the Combi, Air Namibia is doomed forever,” maintained Rukoro.”It doesn’t make commercial sense, it is not in the best interest of the airline and it is grossly unfair to the taxpayers.It will keep the Namibian Government in unnecessary debt.”Rukoro said he was severing ties with the company knowing that he had helped build a solid base for turning around the airline, but that both local and international advice including a Presidential Inquiry had acknowledged that success could only be attained if Air Namibia got rid of the Boeing 747.Air Namibia has said that it could not hope for a better deal: the buyers are reportedly willing to purchase the plane at a third more than the market-related price for such an aircraft.”The price is incredible.We’ve been all over the world.It doesn’t get better than this,” Rukoro said.The Namibian has learnt that a price of US$60 million (N$396 million) is being offered, only U$10 million less than what is currently owed.With Air Namibia’s debts, inclusive of the Boeing, standing at N$1,1 billion, the airline had hoped to be find itself out of the red by this month.But Kuugongelwa-Amadhila maintained that all was not yet lost and that Government was still determining whether “there is any way we can make good of the available option”.The Minister added that Government had to be sure that the interim arrangements were sound in terms of reliability and efficiency.”We can’t dispose [of the plane] for the sake of disposing [of it],” she said.The Namibian understands that Government would have preferred an arrangement whereby Air Namibia’s sale of the Boeing coincided with the lease of long-term replacement aircraft.Rukoro said market demands made such an arrangement virtually impossible and advice from experts has been to treat the transactions separately.”We have come up with very commercially sensible interim arrangements.Three months is not going to make a difference.”It has taken Air Namibia more than two years to comb the market for a suitable buyer for the Jumbo.Air Namibia is expected to begin leasing two Airbus aircraft for its Frankfurt and London routes in October.Government allocated N$366 million to the airline in this year’s national Budget – costing the taxpayer more than N$1,4 billion to keep the Jumbo in the sky since it was bought in 1999.Rukoro’s resignation leaves only three directors to see the transaction through.Kuugongelwa-Amadhila said that Government was already searching for a replacement for Rukoro and would then decide who would take over the chairmanship.Rukoro tendered his resignation to Finance Minister Saara Kuugongelwa-Amadhila on Friday, effective immediately.The former Attorney General accused State House of stalling plans to get rid of the embattled airline’s greatest debt – the Boeing Combi 747-400 – with less than a week left to finalise the sale to yet publicly undisclosed buyers.Despite a November Cabinet resolution, on advice from an independent, Government-appointed aviation expert that the Jumbo be sold, the President has apparently expressed reservations about the deal since negotiations reached an advanced stage two months ago.The Jumbo was scheduled to leave Air Namibia’s fleet by the end of June, following a memorandum of understanding signed with a buyer in May.But following a State House meeting of top Government officials, Air Namibia was instructed by the Finance Minister that it could not proceed with the deal until a replacement aircraft to operate the continental route had been found.”I felt that this interference was uncalled for.It is not something any self-respecting board of directors could live with,” said Rukoro.”The law expects directors to take responsibility for their decisions, but it is Government who is taking the decisions.”Approached for comment, Kuugongelwa-Amadhila confirmed that the sale of the Boeing had attracted State House’s attention, but she denied any interference.”I do not agree that there has been imposition or interference from any Government office.There has been interaction but not interference,” she told The Namibian.”There have been discussions involving a lot of different people within Government.State House has not gone out of its way to tell Air Namibia to do this or to do that.”Secretary to the President Ndeutala Angolo did not respond to messages left at her office.The Namibian understands that Air Namibia’s management met with President Sam Nujoma at State House yesterday to discuss the Boeing transaction further.Three weeks ago, Rukoro informed Kuugongelwa-Amadhila that he planned to give Air Namibia’s management the go-ahead to tie up the deal.But the very next day he was ordered to put a stop to the transaction.”Without the sale of the Combi, Air Namibia is doomed forever,” maintained Rukoro.”It doesn’t make commercial sense, it is not in the best interest of the airline and it is grossly unfair to the taxpayers.It will keep the Namibian Government in unnecessary debt.”Rukoro said he was severing ties with the company knowing that he had helped build a solid base for turning around the airline, but that both local and international advice including a Presidential Inquiry had acknowledged that success could only be attained if Air Namibia got rid of the Boeing 747.Air Namibia has said that it could not hope for a better deal: the buyers are reportedly willing to purchase the plane at a third more than the market-related price for such an aircraft.”The price is incredible.We’ve been all over the world.It doesn’t get better than this,” Rukoro said.The Namibian has learnt that a price of US$60 million (N$396 million) is being offered, only U$10 million less than what is currently owed.With Air Namibia’s debts, inclusive of the Boeing, standing at N$1,1 billion, the airline had hoped to be find itself out of the red by this month.But Kuugongelwa-Amadhila maintained that all was not yet lost and that Government was still determining whether “there is any way we can make good of the available option”.The Minister added that Government had to be sure that the interim arrangements were sound in terms of reliability and efficiency.”We can’t dispose [of the plane] for the sake of disposing [of it],” she said.The Namibian understands that Government would have preferred an arrangement whereby Air Namibia’s sale of the Boeing coincided with the lease of long-term replacement aircraft.Rukoro said market demands made such an arrangement virtually impossible and advice from experts has been to treat the transactions separately.”We have come up with very commercially sensible interim arrangements.Three months is not going to make a difference.”It has taken Air Namibia more than two years to comb the market for a suitable buyer for the Jumbo.Air Namibia is expected to begin leasing two Airbus aircraft for its Frankfurt and London routes in October.Government allocated N$366 million to the airline in this year’s national Budget – costing the taxpayer more than N$1,4 billion to keep the Jumbo in the sky since it was bought in 1999.Rukoro’s resignation leaves only three directors to see the transaction through.Kuugongelwa-Amadhila said that Government was already searching for a replacement for Rukoro and would then decide who would take over the chairmanship.