AIR Namibia says there would be no need for the government to bail them out if it provides a once-off N$3 billion for investment in infrastructure and assets.
Acting finance manager Xavier Masule said this yesterday during a meeting between the parastatal's management and the parliamentary standing committee on economics and public administration chaired by Heather Sibungo.
Air Namibia's acting managing director, Mandi Samson, was also present, as were other management staff, and she led the presentation on the parastatal's status to the committee members.
The presentation looked at what the entity is doing to ensure that taxpayers' money is not wasted, and that accountability and good governance are being upheld. Sibungo had started the discussion by asking Air Namibia to explain the mess they seem to be in with regards to their operations and consistent reliance on annual government bailouts.
Samson, who mainly spoke of how well the company is complying with aviation regulations, also emphasised that the airline should remain operational as it carries the country's flag, as opposed to foreign airlines whose revenue goes back to their countries.
Later, when asked by opposition party leader McHenry Venaani what it would take to make the airline profitable, she said the airline needs N$3 billion.
Her words were echoed by Masule, who had pointed out during the presentation that "No bailouts will be needed if the shareholder provides these capital assets as equity to the airline".
According to him, the government bailout money is mainly used for aircraft rental fees, maintenance and fuel, while he added that government funding could have been spent better if it was used to buy aircraft instead of paying lease fees.
"In the current strategic business plan, we aim to change this so that we move to aircraft ownership, such as the ERJ fleet which was changed in 2017," he said, adding that the ERJ fleet was converted from lease to ownership.
He said this could also be done with the A330s and A319s. He admitted that Air Namibia has not been able to get it right, despite the government bailouts of about N$7 billion over the past decade.
Masule added that things would be better if there is a funding model where shareholder investments in the comparable business is in the form of capital assets such as aircraft, aviation training academies, maintenance of hanger and cargo handling facilities.
"This will remove the burden of aircraft ownership costs from operating revenue, strengthen the balance sheet, and lay a solid foundation for the future," he said.
Masule said they have likewise been looking at alternatives to the Windhoek-Frankfurt route, which is one of the biggest loss-making operations, along with the Luanda route.
According to him, the route will need only one aircraft to and fro, and thus a new route must be found for the other A330, or it must be returned or sub-leased.
He said the parastatal needs to either introduce a route to China via Luanda, or reintroduce a route to London via Harare as well, or fly to Accra, Ghana.
Another issue he raised was that the airline wants to enforce a Cabinet decision to ensure that all government officials fly Air Namibia to support the airline.
He also spoke of the long-awaited financial statements detailing the entity's financial history from 1999 to 2014, which were tabled at the entity's first annual general meeting held in May this year. These statements show that Air Namibia made N$13 billion in revenue over the past 17 years, and spent N$18,7 billion.
Stanley Kariko, the general manager of maintenance and engineering at Air Namibia, said they have always had the maintenance facility, which however has been shut down between 2000 and 2011. He said since then, the airline has established a team of nine people for the maintenance section, but pointed out that "the only limiting factor is a lack of infrastructure".
He said Air Namibia used South African Airways for the maintenance of A319s, and Lufthansa for the A330.
