Air Namibia Acting MD Elia Erastus said the airline will review the full impact of COVID-19 on its operations after 36 months even though they’ve managed to fully retain staff and pay salaries during the lockdown.
Erastus revealed that Air Namibia has had zero revenue generation in the last month. He was hopeful the relaxation of lockdown regulations would allow the airline to focus on internal flights and generate some revenue.
Erastus said the national airline will focus on regional flights to curb competition. He points out that the negative ripple effect of COVID-19 on airline operations is massive. He says over 4,000 jobs are now at risk in businesses that rely on the airline.
“The consumables that we are transporting are a small percentage of our operation. Currently the jobs of our employees are secure but I wouldn’t want to say this is long term. To do a re-startup plan for the aviation industry will not take six months, it will be 36 months. We need to remodel. Our neighbor South Africa with largest fleet is in a serious problem. For us it all depends on when the consumer confidence will pick up so we convince people to fly, which will impact on workforce retention and our operations,” said Erastus.
Analysists believe that the global airline industry has been adversely affected to the sum of US$130-$200 billion. Air Namibia has confirmed losses of N$100 million per month.
Erastus said, without its normal operations, the airline managed to pay salaries on time thanks to the shareholder (government).
Erastus told the Windhoek Observer that Air Namibia must generate increased demand. Clients must be enticed to take flights again. They are aware that this may be a slow process and will pick up over time.
“The aim is to have the curve that the airline wants based on its business model but the restart plan based on the business continuity is there and in 18 months or so it will be able to see an increase in customer confidence depending on the restrictions,” he said.
“In 2015/2016 the aviation industry and specifically Air Namibia contributed N$704 million to the GDP. This amount rose to N$1billion in 2017/2018. Our anticipated growth for GDP if we were operating normally would have been N$1.2 or N$1.5 billion. The ripple effect caused by COVID 19 is impacting both the revenue collector (government), the inbound operators such as the tourism industry and small business enterprises. Namibia generates revenue from these operations,” said Erastus.
To survive this period, he said the airline will make use of the stimulus package announced by the Ministry of Finance and the Social Security Commission (SSC). The airline has also approached its shareholder (government) to assist with a supplementary budget while we are doing charters to compliment what we are getting.
“As a commercial entity we believe we will be one of the entities that can add more to the coffers of government other entities,” Erastus said.
Quizzed on airplane lease fees, he said, “As for the planes that we are leasing, that payment will be part of the payment holiday.”
This comes as Public Enterprises Minister Leon Jooste revealed that government will continue subsidize the cost of Air Namibia.