Air Namibia in Financial Trouble

Air Namibia is struggling under the weight of some serious financial problems. Top of the list is that the airline owes more than N$250 million to Namibia Airports Company. But its exposure does not stop there.

Recently, Namibian Government Minister, John Mutorwa visited Air Namibia to discuss the situation with the airline’s Acting Managing Director Mandi Samson. Samson described the company’s problems as threefold: insufficient cash flow, a lack of annual reporting, and a lack of confidence by domestic banks and financial lenders.

Despite Air Namibia being wholly owned by the Namibian Government, the airline has been unable to secure any fresh source of financing from within the country. Samson said, “If the entire country cannot assist us then we have to look elsewhere. We are looking for financing at other countries such as South Africa”. However, she could not say how much money was required or if she was making any progress acquiring it.

The Namibian Government has discussed the airline’s financial problems and permission has been granted at Cabinet level for the airline to seek to borrow the money on the open market. Minister Mutorwa urged the airline to publish its annual accounts without which no lender would be remotely interested, including the Finance Minister Calle Schlettwein as the annual reports are required by law. Samson said the financial reports will be available in June. Air Namibia has not published any annual reports for the last ten years.

Air Namibia Board Chairman, Gerson Tjihenuna said the airline’s financial crisis is putting jobs at risk, not only the 700 workers directly employed by the airline but also 70,000 other workers whose jobs indirectly depend on the airline.

Tjihenuna said the Government had previously made commitments to the airline including N$3 billion to cover aircraft leasing costs. However, over the last 18 months, members of the government have been increasingly vocal, questioning the millions paid out in subsidies, and even asking if the airline is really necessary.

Since 2000, the government has given Air Namibia more than N$6 billion in subsidies. And the government has budgeted to continue giving subsidies the airline: N$486 million in 2018, N$494 million in 2019, and N$498 million in 2020.