The top five markets with blocked funds are:
• Venezuela: $3.78 billion
• Angola: $386 million
• Sudan: $170 million
• Bangladesh: $95 million
• Zimbabwe: $76 million
Months after the International Air Transport Association (IATA) called on governments to abide by international agreements and treaty obligations to enable airlines to repatriate revenues from ticket sales and other activities, The Patriot has learnt that the cash-strapped Air Namibia cannot repatriate an estimated N$11 million of its funds blocked in Zimbabwe.
This information comes days after news broke that an Air Namibia aircraft was impounded in Zimbabwe, a move which has threatened to turn into a diplomatic row.
Senior government officials privy to the airline debacle told this publication that Air Namibia has exhausted all avenues to obtain its funds but blockages due to Zimbabwe’s bad economy has turned the move into an uphill battle.
According to IATA, the amount of airline funds blocked from repatriation worldwide totaled $4.9 billion at the end of 2017, which was down 7% compared to year-end 2016. However, airline funds remain blocked in some 16 countries.
“The connectivity provided by aviation is vital to economic growth and development. Aviation supports jobs and trade, and helps people to lead better lives. But airlines need to have confidence that they will be able to repatriate their revenues in order to bring these benefits to markets,” said Alexandre de Juniac, IATA’s Director General and CEO at the IATA conference that was held in Australia earlier this year.
“We have had some recent success. The $600 million backlog in Nigeria has been cleared. And we have made $120 million of progress from a peak of over $500 million in Angola. I encourage the government of Angola to work with airlines to help to reduce this backlog further,” said de Juniac.
Given the deepening economic crisis in Venezuela, a resolution appears to be unlikely in the short term. But we are encouraged by the recent developments in Nigeria and Angola, and hope other states will also move quickly to address blocked funds,” de Juniac said at the time.
The decision by Zimbabwe’s courts to impound the aircraft could have severe repercussions for Air Namibia because the impounded aircraft belongs to West Air aviation.
Sources within the airline said Air Namibia entered into a lease arrangement with Westair Aviation in May this year to utilise the aircraft belonging to Westair to operate the Air Namibia schedule whilst the Air Namibia aircraft are undergoing maintenance.
“The impoundment has strained us severely because we have to pay the entire lease amount even while the aircraft is standing. We hope this matter will be resolved soon so that our operations can continue as normal. We are one of the few airlines that fly into Zimbabwe because of the cordial relations Namibia and Zimbabwe shares, so for them to treat us in such a ruthless manner comes as shock. We stood by them when other airlines pulled the plug,” quipped an Air Namibia source.
Meanwhile, Air Namibia’s board chair Gerson Tjihenuna this week wrote to Minister of Works and Transport John Mutorwa to update him on the affairs of the airline related to the impounding.
The aircraft was impounded after five Zimbabwean nationals who were travelling to Turkey who were denied boarding by Air Namibia, filed a lawsuit.
Air Namibia denied the passengers boarding on the advice of the German border police who indicated to the airline that the passengers were not to be allowed to travel to Germany. It was the view of the border police that the passengers in all likelihood would seek political asylum in Germany and, on that basis, the airline was advised not to transport the passengers.
Air Namibia subsequently repatriated the passengers, on the flight with which they arrived, to Zimbabwe.
The passengers proceeded to instituting legal action against the airline, claiming an amount on USD 1 Million. The legal action is based on an application to court for the attachment of Air Namibia property in order to found, or confirm, the jurisdiction of the High court of Zimbabwe over Air Namibia in order to have the matter heard in court. Air Namibia instructed the firm of Musimwa and Associates in Harare to attend to the proceedings on behalf of the airline.
“The airline was advised that the applicants took no further action to prosecute their claim until the Air Namibia lawyers lodged an application on 22 June 2018, this application was brought for the dismissal of the case due to the fact that the applicants took no action in moving the case forward. The passengers were served with the papers on 27 June 2018.
Subsequent to the application for dismissal, the passengers resumed pursuing their application and obtained a court order for the attachment of Air Namibia property, Air Namibia became aware of this through the media on 13 July 2018,” said Tjihenuna.
The airline, the chairman said, was informed that the lawyers filed an appeal with the Supreme Court of Zimbabwe to have the order made by the High court set aside. “The lawyers representing Air Namibia brought an Ex Parte application to have the execution, or attachment of Air Namibia property, stayed pending the determination, or hearing of the matter, by the Supreme Court of Zimbabwe. This application was dismissed by the Judge who heard the matter. Air Namibia also learned of this development through the media,” he said. Air Namibia has instructed the firm of Honey and Blanckenberg to represent the airline with respect to the matter.
Tjihenuna said efforts are currently underway by the newly appointed law firm to have the appeal to the Supreme Court reinstated by way of an application to have the appeal so reinstated. Noting the fact that the application is out of time, condonation will have to be sought to have the matter heard.
“Air Namibia is advised that there were procedural matters which had to be attended to prior to the initial order having been made against the airline. This is evident in the fact that it would appear that the court lacked jurisdiction to hear the matter from its inception, the passengers were denied boarding in Windhoek, meaning the cause of action arose in Namibia. Therefore bringing action against Air Namibia in Zimbabwe should not have been possible based on the fact that the passengers were denied boarding in Windhoek, Namibian courts enjoy jurisdiction to determine the matter. It is anticipated that the process of having the matter reinstated before the Supreme Court may take a number of days without any guarantees at this stage, the airline will be advised of progress to this effect as events unfold,” he said.
Air Namibia has since cancelled flights to Harare pending the matter being addressed.