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Air Namibia’s current debt unstainable: Shiimi

Summary

Government can no longer afford to continually provide financial support to the financially strapped Air Namibia; hence Cabinet took the decision to liquidate the national airline, Minister of Finance Ipumbu Shiimi has said.Speaking at a press confer…

Government can no longer afford to continually provide financial support to the financially strapped Air Namibia; hence Cabinet took the decision to liquidate the national airline, Minister of Finance Ipumbu Shiimi has said.

Speaking at a press conference here on Thursday, Shiimi said the national airline has an asset value of N.dollars 183 million with liabilities of N.dollars 3 billion, which is unstainable and will jeopardise the economic recovery plan government is currently seized with.

He explained that all options assessed point to the fact that the national airline is not profitable and it has not been profitable since its inception.

“The net economic cost operations of Air Namibia far outstrip the net gains and are thus unstainable. At this stage the country’s economy can no longer afford to perpetually provide financial support to Air Namibia at the expense of supporting economic growth and critical social services,” Shiimi noted.

The minister also explained that it is estimated that so far government has spent more than N.dollars 8 billion on the national airline, noting that government has explored and considered all other options, which included engaging other airlines for potential investment and partnership.

Shiimi further noted that the welfare of the employees remains a priority and government has committed to an ex-gratia payment to the value of 12 months’ salary for each employee.

“Allegations in some quarters of the public accusing government of closing Air Namibia deliberately for the growth of another airline is totally misleading,” he stressed.

In the same vein, the minister explained that it was agreed that internal staff members from the Ministry of Finance and Ministry of Public Enterprises will serve as interim board members.

The selected board members are the finance ministry’s director of assets, cash and debt management, Marten Ashikoto, and Tjiuee Kaura, who is a director in the Ministry of Public Enterprises.

Source: Nampa