AirNam Gets Tossed A Breath Mint

27 December 2019, 00:53

Opus1

A N$578 million loan against a N$5 billion shortfall to remain solvent and they owe billions more. So they get to keep the lights on for a few more months. Most likely rather than paying off their maintenance invoices and other service providers, the funds will be used to line a few more pockets before they close for good.

TIA

quote:

Local bank bails out AirNam

News - National | 2019-12-25

by Charmaine Ngatjiheue

Local bank bails out Air Nam. Photo: Contributed

AIR Namibia has received a N$578 million loan from a local bank to settle its debts and normalise operations.

These funds would go some way towards normalising the cash-strapped airline's operations until the first quarter of 2020 when the outcome of a final decision regarding the long-term future of the airline is expected to be announced.

The airline recently received the go-ahead from the government to acquire a loan from local financial institutions using a government guarantee.

Speaking to The Namibian on Wednesday, Air Namibia's acting chief executive officer, Xavier Masule, said the local financial institutions were approved to bid, a successful bank was selected, and the loan approved and disbursed.

"We have access to the funds, and these are being used to pay for qualifying arrears invoices, including aircraft maintenance and other service providers, which will see our operations normalise soon," he said.

The airline needs roughly N$5 billion to restore solvency and implement a new, feasible business plan.

Masule could, however, not reveal the name of the bank that has provided the loan due to a confidentiality clause.

"The name of the bank, as well as the interest rate and repayment terms, is classified as confidential as per the loan agreement and may not be revealed," he said.

Public enterprises minister Leon Jooste reiterated that the N$578 million government guarantee, which enabled the airline to acquire the funds from local banks, was simply to allow them to sustain their operations until the first quarter of 2020 pending the outcome of a final Cabinet decision.

"A full bailout plan will require a great deal more and Cabinet will have to weigh this against the opportunity cost of funding other social or productive projects and programmes," he said.

27 December 2019, 04:19

jdollar

You would have to be really stupid to buy a ticket from these clowns more than 2 days in advance.....They remind me of Air Cameroon.

27 December 2019, 06:07

Opus1

And SAA is in a far bigger hole. Scary.

28 December 2019, 22:08

Bud Meadows

Air Nam = Armpit Airlines

28 December 2019, 23:39

Saeed

And I bet most of the money they received has already been counted for!

29 December 2019, 03:34

jdollar

Yea, in a numbered Swiss account.....

29 December 2019, 10:00

Saeed

quote:
Originally posted by jdollar:
Yea, in a numbered Swiss account.....

Exactly!

Only New York Bankers are more corrupt than AFRICAN officials

30 December 2019, 01:48

Gusteaux

Air Namibia isn't the only nationally flagged carrier that gets subsidies from their respective governments.

https://www.prnewswire.com/new...minal-300134208.html

30 December 2019, 13:56

Saeed

quote:
Originally posted by Gusteaux:
Air Namibia isn't the only nationally flagged carrier that gets subsidies from their respective governments.

https://www.prnewswire.com/new...minal-300134208.html

But Emirates got money to build a new terminal.
Income from the terminal goes to the government, not Emirates.

Regardless, would passengers fly AirNamibia or Emirates??

Facts speak for themselves.

Comparing chalk and cheese does not even come close here!

Right now, according to Flight24, there is just ONE Air Namibia flight active.

Emirates has 134 International flight active.

30 December 2019, 21:30

Gusteaux

Well, you never know. Yes, as it stands now, Air Nam service seriously sucks. Even stranded us in Botswana this past Aug. Maybe if the Namibian govt could afford to subsidize Air Namibia to the tune of a $100+ billion dollars like the UAE govt does Emirates, they just might.

As it is, UAE spent the equivalent of over 1/2 of Namibia's entire GDP for 2018 just on the ONE terminal.

A govt subsidy is a subsidy, is a subsidy. If the govt owns the pants and takes money out of one pocket and puts it in another pocket and that pocket puts in back in the first or even a third pocket it's still the same pair of pants.

This would be an interesting economic study. Since the socialists/communist favorite mantra seems to be "every one should pay their fare share", I wounder what would happen if govts around the world started adjusting their airport landing and various usage fees to offset and counter the various govt subsidies other Nationally flagged carriers receive from their respective govts. Drive up the ticket prices of the most heavily govt subsidized carriers so the ticket prices are all equal. The other national flagged and regular commercial carries might then be able to improve their service due to increased review and the various airport afford to upgrade and improve their terminals and facilities. Wonder how long the govt subsidized carriers could operate on forced equivalent ticket prices to Europe and the west?

30 December 2019, 21:54

stubbleduck47

The issue with the oft bantered about "Fair share" concept is who gets to decide what is a "Fair share"?

30 December 2019, 22:20

Saeed

Who would you rather fly with??

That is the ultimate question air passengers ask themselves.

Right now, Gulf States airlines and some Far East airlines are better than American or European airlines.

30 December 2019, 23:29

Lhook7

I’ve flown both and there is no comparison. I’m flying Emirates business class to Zimbabwe again in April. At this point you couldn’t pay me to fly Air Namibia again.

30 December 2019, 23:29

Gusteaux

Agreed. But they are also the same ones that receive the biggest handouts from their respective governments.

It's remarkable that the 3 top rated airlines in the world are also the same ones getting the biggest handouts from their govts. Coincidence?

Would be very interesting to see how any of them do if they had to stop feeding at the govt troughs or tariffs, landing and usage fees were pro-rated to each according to the amounts of handouts they each receive.

Never know - with the current movement away from globalization and as countries continue to move to more protectionist economic and trade policies, the above may not be hypothetical or even that far away.

We definitely are living in very interesting times.