Failure to buy six planes ‘will negatively affect’ Air Nam’s operations

Windhoek-Air Namibia has confirmed that it intends to purchase six Embraer jets, ERJ 135 and ERJ145, to replace current aircraft lease agreements and hopes to take possession of the new aircraft in January and April 2018.

However, Air Namibia manager for corporate communications Paul Nakawa could neither deny nor confirm the reported purchase price of N$200 million, saying it is normal aspect of any transactional business and that the airline is adhering to non-disclosure clause, as per the terms of the sales agreement.

Yes, the board did approve the acquisition of the six aircraft, because it makes business sense to improve our balance sheet with the acquisition of assets that contribute 100 percent percent to our daily operations, said Nakawa.

He added that a Cabinet submission was already prepared and that it was up to Cabinet to provide further directives to the airline, as the government wholly owns Air Namibia � hence government currently pays for the current aircraft leases.

Nakawa noted that Air Namibia hopes to conclude the sales agreement as soon as possible, saying failure to do so will have a negative impact on our operations and on the schedule integrity if we do not have aircraft for our utilisation.

Currently, all Air Namibia's Embraer aircraft are serviced at Eros airport by the airline's own engineers. Also, all of Air Namibia's pilots are trained on these Embraer aircraft. The airline already has crew trained to operate the ERJs. Once the new aircraft are in the Air Namibia stable they will service the domestic and some of regional routes serviced by the current ERJ fleet in operation.

The Namibian newspaper reported recently that Air Namibia's management committee recommended that the airline buy the six planes for almost N$200 million. According to a document cited by the paper, entitled 'Procurement committee submission request for proposal in supply of six Embrear regional jet aircraft', Air Namibia's aircraft selection committee apparently looked at whether the airline should buy new planes, or continue leasing.

According to its website, Air Namibia operates a fleet of ten aircraft: two Airbus A330-200 for the international route; four Airbus A319-100 for regional routes and four Embraer ERJ 135 Embraer for domestic routes. The airline owns two Airbus A319-100, with a seating capacity of 112.

The individual lease agreements of the four Embraer aircraft end next February, April, May and June. The initial expiry date of the agreements were January, April, May and June last year, but the leases were extended twice for 12-month periods.

The management committee said purchasing similar aircraft would minimise or eliminate losses arising from lease payments, and allow for maintenance reserves to be recorded as contingent investments and not expenses, as was currently the case.

They also claim that buying would eventually minimise the need for regular government financial bailouts. They added that purchasing aircraft had the least funding hurdles, was the least expensive option, and would strengthen the airline's balance sheet.

Source: New Era Newspaper Namibia