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Saturday 19 January 2019
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Helpless and nosediving

..Is Air Namibia flying without a future?

Inside the grim battle for Air Namibia’s soul is a political battle that signifies the underlying hostility amongst ministers in Cabinet over the future of the embattled airline. After unconfirmed media speculation about Jooste’s role in the sale of aircrafts leased by Air Namibia to West Air Aviation, the minister has since distanced himself from any wrongdoing and in fact stated on several occasions that helping Air Namibia is the only thing on his mind. The strong business background, access to all sensitive files of state-owned enterprises and aviation connections offer a rare glimpse into the life of Jooste in his role as the Minister of Public Enterprises. Seen by many as one of President Hage Geingob’s blue-eyed ministers, the pressure, claims and allegations directed towards Jooste comes as no surprise if you consider the fact that all SOEs must effectively pass through his door. The Patriot has learned that Jooste this week wrote to Air Namibia requesting financial and operational information of the airline. Jooste requested to be accorded with Air Namibia’s Airbus Study, business plan, 10-year annual report, latest signed off annual financial statements, 2016 Skills Gap Analysis Report, latest Air Namibia route performance report and the draft board performance agreement. In his request this week, he also informed the board chairman Gerson Tjihenuna that he has appointed members to serve on the Joint Task team for the Relook of the Air Namibia Business Case.

 
The task team will also comprise of members from the airline’s board and management team. According to the terms of reference of the task team, Jooste outlined that the task team will be responsible to conduct a critical assessment of existing and planned Air Namibia routes with the purpose of rationalizing the routes towards reduced loss-making. “More specifically this will include an analysis of the Air Namibia Frankfurt route and the economic costs and legal implications of exiting route,” he said. The team will also be responsible to carry out an assessment of current fixed and variable expenditures with the purpose to introduce cost effective measures. It will also be responsible to validate the direct and indirect contribution of Air Namibia to the Namibia economy, identify alternative funding mechanisms to restructure the airline’s N$300 million debt.
Jooste also wants the task team to identify and develop potential alternative ownership and business management models for Air Namibia to potentially include partial outsourcing of certain functions, public-private partnerships as well as partnerships with other national airlines.
The team will also be expected to review Air Namibia’s strategy for outstanding court cases to minimize financial exposure. “We thus consider it wise to proactively work together with Air Namibia.  The Task Team will aim to seek sensible solutions to reduce the pressure on the taxpayer and find the best way forward for Air Namibiaand our country. At MPE we believe in evidence based decision-making.  Hence, we need to obtain and analyze key data and information and equip ourselves with all the facts.  In a joint effort, the Task Team will peruse all available studies and documentation.  According to Jooste, any ‘relook’ of Air Namibia’s business case will have to be based on facts, to be able to draw valid and sensible conclusions.  When asked what the future holds for the national carrier in terms of purchasing new aircraft, Jooste said: “It would also be premature to have any views regarding purchasing or leasing of aircraft at this stage, without taking into account all relevant information.” Company sources say the request for the confidential documents is not sitting well with the board and management alike because of the sensitive nature of the information while others questioned the minister’s intentions saying the information could be damning for the already-bleak-looking future of the airline if it falls into the wrong hands. “The minister told Air Namibia in the past that he promised them that talks around privatization of the airline are mere rumours and vowed that the airline has his full support but now he is talking of outsourcing some functions and public-private partnerships. The minister must be honest and tell the nation what his real intentions are because the sudden urgency around this matter soon after West Air bought the planes is very suspicious,” said the source. Rumors of a shadow airline abound especially with the sudden reemergence of Rene Gsponer who worked as Acting MD in 2015 in Windhoek.

 
The source added: “The information he is requesting deals the future plans for the airline which are top secret, in fact, Air Namibia is not even obliged to give him the information because he has no legal mandate yet to make such requests.” Jooste has been accused of sharing sensitive Air Namibia information with third parties and allegedly forming part of a plot to clip the wings of the national carrier. Claims he refuted extensively in a past interview with this publication. The minister said he shares no personal or professional ties with West Air Aviation as alleged when it became public that the local aviation firm purchased the four Embraer 135 jets which Air Namibia is currently leasing from French aviation giant, HOP!. “I have no professional ties with this company at all. My family was involved in the aviation business many years ago and I therefore know several people in the sector but I have no friendship or relationship with anyone working for this company,” he said at the time.  As regards the HOP/WestAir matter, Jooste said his Ministry does not get involved in day-to-day management matters and this topic was not part of our discussions. “Air Namibia has been established under the Companies Act and is therefore under the authority of a Board. This Ministry represents the shareholder interests.”

 
The losses
Jooste said he wrote to the Minister of Works and Transport Alpheus !Naruseb regarding the Air Namibia matter. Regarding the lack of mandate, his response was: “This Ministry that I am heading is called the Ministry of Public Enterprises, preceded by the State Owned Enterprise Governance Council. We have an inherent responsibility to act in the best interest of Government as the Shareholder.  The Cabinet Committee on Treasury requested that my Ministry take a closer look into the Air Namibia business/operating model and to propose measures to improve its capacity.”

 
Legal action looming
Nakawa said the airline is assessing the need and purpose for sharing the information and added that the integrated annual report is almost done compiling. It will be published on or before end of September 2017.  Regarding the leasing of aircraft, should government refuse to endorse the purchasing plan, what is the way forward for Air Namibia? “To remain in a leasing arrangement, this will be costly for the taxpayer. The Air Namibia purchasing proposal is based on the prevailing economic situation of the country as well as a need to strengthen the balance sheet of the airline,” said the spokesman. Asked if Air Namibia will institute legal action taken against HOP! for violating the lease agreement by selling the aircraft to West Air without informing Air Namibia, Nakawa said: “HOP! has been put to terms to comply with the lease agreement existing, whether legal action is anticipated or expected depends on their course of action, Air Namibia however expects HOP! to comply with the existing lease agreement.” He also said Air Namibia is yet to convene for a meeting with Westair as yet “because of Air Namibia being averse to such a meeting but simply because Air Namibia seeks clarity from its contracting party, HOP!, on the status of its engagements with Westair as well as a need by the airline for its right in the lease agreement to be guaranteed by HOP!. This remains an obligation on HOP! to that effect.” HOP! refused to comment on the matter.




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