Africa: Air Namibia in Cash flow problems as 3 Airplanes seized by Maintenance Company leads to Cancellations

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Windhoek based Air Namibia is facing a liquidity problem. This is forcing its Airbus A319’s to be grounded until the airline can pay thousands of dollars in outstanding maintenance fees.

The current cash crunch that Air Namibia finds themselves in stems from an ongoing court case with the now-defunct Challenge Air. The former Belgium based airline is demanding that Air Namibia pay them N$400 million ($27 million USD) and has taken Air Namibia to court in Germany.

Air Namibia’s lack of available funds is the result of a 1998 sublease agreement that now has its assets frozen in European banks. Due to the cash crunch and the airline’s inability to pay its maintenance costs, flights have been scaled back dramatically.

Air Namibia scales back flights
A spokesperson for Air Namibia Paul Nakawa told the Namibian New Era Live newspaper about the airline’s money troubles saying,
“Due to the ongoing court case by Challenge Air, Air Namibia’s funds have been frozen in Europe and this has caused a severe liquidity problem at the airline.”

New Era claims it has seen a confidential document from Air Namibia. In it, it says the airline has had to cancel all flights to the Angolan capital of Luanda as well as cut the number of flights between Windhoek and South Africa.

Passengers who previously travelled on Air Namibia to Luanda will now have to fly on codeshare partner TAAG Angola Airline. Now, Air Namibia only flies to Johannesburg once a day instead of the three previous daily flights the airline operated. As for Cape Town, flights will be reduced to two flights per day instead of the three that Air Namibia used to fly.
Why has Air Namibia cut its flights?

All of these cancellations and cutbacks are consequences brought on by the fact that three of the four Airbus A319-100’s that the airline owns are being held by the companies that performed maintenance on them.
One of the aircraft, V5-ANK, has been stranded in Larnaca, Cyprus since January. Two other aircraft, V5-ANN and V5-ANM, are sitting at Johannesburg O.R. Tambo International Airport.

This situation leaves just one narrowbody A319, V5-ANL, to service regional destinations. Should the last remaining A319 suffer technical or maintenance problems, Air Namibia’s regional operations would grind to a halt.

Why doesn’t the government pay Air Namibia’s maintenance bill?
When you are a government-owned airline, surely the government has to fund you in order to keep what is in effect its own airline flying?
n the confidential document that was seen by New Era Live, interim CEO, Xavier Masule expressed his concerns to the Ministry of Works and Transport, saying,

“The further risk relates to the fact that SAAT (South African Airways Technical) is the maintenance service provider on this fleet, and they might not be in a position to attend to the aircraft (as is the case with our other A319 aircraft).

“During April 2019, a payment of N$19 million was made to SAAT, a further N$6.9 million will be paid to them by 31 May 2019. SAAT will be in a position to reconsider and allow the provision of required services if we make another substantial payment for minimum N$20 million with a commitment on how the balance will be settled,”

The Namibian Dollar to USD exchange rate is: 1 USD = 14.7761 NAD1 or 1 NAD = 0.0676770 USD.

As well as the four A319, Air Namibia also has two A330-200s, four E135s, and one E145 wet-leased from Westair Aviation.

By Mark Finlay

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