By Staff Reporter
Public Enterprises Minister Leon Jooste has confirmed that the Chinese route is not feasible for Air Namibia despite a number of Chinese nationals and Namibians travelling back and forth regularly between the two countries.
The minister said the airline is faced with limited options when it comes to flying lucrative routes.
“They have plotted that as well (Windhoek to China route). As part of the route feasibility they have thousands of potential routes and they have tested those as well. Over time they may become more feasible but at the moment the research shows that it is not feasible,” said the minister.
The minister said committing to a new route for any airline is a big and expensive undertaking.
“They usually start off loss-making and they hopefully turn into profitable routes over a period. It takes a lot of marketing; there are a lot of costs involved. So ideally those are issues you would want to have sorted before you start operating a route,” he said.
This March, Kenyan officials and Namibian counterparts considered opening the Windhoek-Nairobi route on top of commitments to strengthen bilateral ties in trade.
This was during the time President Uhuru Kenyatta visited the country.
Many critics saw the Air Namibia-Kenyan idea as more of a charm offensive by the Kenyans considering the high profile presidential visit.
The idea was severely criticised by Kenyan citizens who took to twitter and expressed that a majority of them rarely visited Namibia.
The Patriot wanted to understand if this was an undertaking the minister was taking seriously considering the few people who travel from Namibia to Kenya and vice versa.
“It’s interesting. We will in due time share those reports with you. The way they do the routes feasibility studies is actually fascinating, obviously they do it all electronically nowadays.
Shorter routes, longer routes, indirect routes, extension of current routes, and absolutely any route you can imagine. And the results of those route feasibility studies are usually very accurate. They are obviously based on assumptions but they base them on the current flow of passengers between certain centers.
Now the outcome of the recent route feasibility studies has shown that from our position, our location in Namibia, there are very few routes that will be highly profitable, especially on long-haul routes. We’ve spoken about this in the past and you have published it, there are a number of challenges that we are facing,” said Jooste.
The biggest one of the challenges is the two large airbuses Air Namibia is leasing and which are operational on the Frankfurt route, regarded at the moment as the “Achilles heel” of Air Namibia.
“The reason for that is the lease agreements are extremely high and they are twelve year lease agreements. We are in year six now and there is no exit clause to those lease agreements at all. We are paying in foreign currency so you can imagine,” said the minister.
Over the last six years already these leases have exponentially escalated in Namibian dollar terms due to tremendous exchange rate fluctuations.
The biggest challenge for Air Namibia remains that of finding alternative routes for the two aircraft, the minister said.
From the route feasibility studies carried out so far, the minister said the picture does not look that rosy.