Airnam Dumps Accra Route

COMPETITION and viability challenges have pushed Air Namibia to abandon its Accra route in June this year, senior sales and marketing manager Wimpie van Vuuren revealed yesterday.

The airline started operations on the Windhoek-Johannesburg-Accra route in 2009, but after cabinet approved a new business plan, the route was changed to a direct Accra-Windhoek flight.

This was done despite the airline’s knowledge that the route had limited traffic volumes, but in the hope that the introduction of a direct service would help grow the traffic to the desired levels.

“Part of the reasons why we failed to continue operating this Accra route is the market’s failure to grow fast enough,” said Van Vuuren, adding that the other problem is the absence of a visa issuing office in Ghana.

“People need to go to Abuja to get a visa before flying to Windhoek, making the destination unattractive,” said Van Vuuren, who added that the termination will be effective from 26 June 2014.

Van Vuuren further said the company will continue to be active with sales visits and will maintain its travel level trade.

The airline will use its interline, commercial agreement (SPA) with South African Airways and Kenyan Airways (KQ) to offer flights between Namibia and Ghana, via Johannesburg and Nairobi.

Van Vuuren said the airline industry has become very competitive with major operators seeking opportunities in emerging markets such as Africa.

“Emirates, Qatar Airways and Etihad are Gulf carriers committed to dominating and making their mark, while European airlines have significantly increased their capacity in Africa as well,” said Van Vuuren.

He said regional powerhouses include Ethiopian, Kenyan and South African Airways, which are linking Africa to the world and thus toughening the competition for Air Namibia.

“It is extremely expensive to operate a lean route like Accra,” added Van Vuuren.

Although the actual loss incurred in monetary terms will only be available next week, the company’s operating margin shows that in 2012, it was operating at margins of up to -250%. In 2013 it was -150%.

Additionally, the operating margin from February to April this year ranged between -61% to -146%.

Head of communications Paulus Nakawa explained that these figures mean bad news for the company, because what the company wants to achieve is zero percent which means [breaking even] good business.

“The lower the operation costs the better for the company, something like -146% is bad news,” he said.

Manager for Government and Bilateral Relations Elise Petersen said, “The company stopped flights to Accra because of finance, that is the main reason. However, this does not mean we are closing the route, our bilateral relations will continue to exist.”

The pullout comes several months after Air Namibia welcomed its newest competition – the German airline, Condor’s, whose winter timetable includes Windhoek as a new long-haul destination thus expected to give the national airline tough competition on its Windhoek-Frankfurt route.

Observers warned that the decision to allow direct competition for Air Namibia will result in tough times for the airline as Condor, which is Lufthansa’s low cost airlines’ subsidiary, will also fly the same route.

Source : The Namibian