Save Air Namibia!
THE proposition to liquidate our national and flagship carrier, Air Namibia is one that needs careful consideration and by all means necessary, the first and only option should always be one that looks at saving it from going under.
With the Cabinet Committee on Treasury (CCT) now pushing for outright liquidation with an option to start a new national airline, a casual approach that ignores the merits of the Integrated Strategic Business Plan (ISBP) presented by the executive of the airline showing that it can break-even within three years of implementation and actually attain profitability within five years, should not be tolerated.
We have reported this week that Air Namibia’s ISBP is premised on dropping the costly Frankfurt route which alone generates approximately N$700 million of losses out of a total of N$1.28 billion expected for 2020.
Once this is achieved and together with a myriad of other measures, the national airline projects that its revenue base will increase from N$1.4 billion to N$1.9 billion, operational costs will reduce from N$2.7 billion to N$1.7 billion and profit margins will increase from -N$1.27 billion to N$148 million over a five-year period.
This business case warrants critical evaluation that weighs in on the long-term benefits of having our own national carrier vis-à-vis the short-term losses that will be incurred in the next two years until the business plan breaks even.
This evaluation should also be done with due consideration that the idea of starting a new airline seems far-fetched and could take several years to get off the ground. When we eventually do, competitors in both domestic and regional routes would have achieved economies of scale and cemented their dominance of these routes.
What we can never deny is that, Air Namibia has played a significant role in nation building and national identity. Historically, airlines have been regarded as important national symbols and they have been used by governments as ‘chosen instruments’ for projecting their countries internationally. This key role remains for Air Namibia.
As Cabinet sits today to deliberate on the matter of Air Namibia’s liquidation, these executive members also have to remember there are some things you simply have to protect: Education, national security, banks and infrastructure are all fundamental. An airline to call your own is also useful to get your citizens around the world and bring in visitors to invest and marvel at your achievements.
The fundamental purpose of a national airline should be to serve the national interest and contribute to socio-economic development by providing the strategic air links safely, smartly, efficiently, sustainably and cost-effectively in a fast mutating world.
That said, all national stakeholders and taxpayers in particular must embrace this fundamental purpose and set reasonable expectations in terms of profitability.
With a promising ISBP already in place, we recommend that the shareholders must take this option of continuity. To safeguard the ideals of the plan and ensure its success, Public Enterprise Minister, Leon Jooste must set up a competent, honest, diverse, and respected board of directors whose members demonstrate integrity, adhere to the best norms of good corporate governance, and add significant value. The board must ensure that the national airline is effectively managed by competent, innovative, savvy, honest, and committed professionals whose integrity is never in doubt.