Air Namibia revival faces fiscal scrutiny amid calls for accountability
The prospect of resurrecting Air Namibia is generating cautious optimism, as stakeholders look to the upcoming fiscal budget for clues on its feasibility. This comes off recent comments by newly appointed transport minister Veiko Nekundi that government may consider reviving the airline which was liquidated in 2021 following a N$10 billion write-down by the government at the time.
“The budget will have clarity around the thinking, if indeed Air Namibia is coming back, and how different it will be run in relation to what led to its closure. We will need to understand what the thinking is behind bringing back Air Namibia,” Hei said.
Further compounding its likely revival was whether the government would be happy to fund a business with thin profit margins.
“Airlines have very thin business margins, more so national airlines. The modelling should be, what is the threshold on losses that you can absorb and what component of that loss are you going to be able to absorb through travelling tourists,” Hei said.
“The budget should shed more light in terms of what the thinking is and whether we can afford the funding model for an airline,” he added.
University of Namibia (Unam) academic Omu Kakujaha-Matundu said Air Namibia’s revival would be welcomed on the basis where it can demonstrate a good business case.
“No one will stand in the way of a good national project. The beauty of appraising the viability of Air Namibia is that it is not a new project. The numbers from its past operations are there. The government should interrogate those numbers in the presence of new evidence that necessitates its revival,” Kakujaha-Matundu said.
According to him, should it be shown that the benefits with a revived Air Namibia outweigh the cost of operating without it, then it can be given a go ahead or be revived.
Sound business principles
The revival of Air Namibia would also require it be run on strict business principles, Kakujaha-Matundu said.
“The revival of Air Namibia calls for a comprehensive financial and economic appraisal. Let\'s set aside emotions and let the revival of Air Namibia just like any other national project be strictly determined on firm business principles. There should be little room for error this time around.”
Economic Association of Namibia (EAN) executive director Cons Karamata echoed Kakujaha-Matundu’s sentiments around the airline being run on sound business principles, and said it can help stimulate the tourism sector.
“I support the revival of Air Namibia, provided it is underpinned by a sound business model, strict operational efficiency, and strong public-private partnerships. A well-managed national airline can stimulate tourism, enhance trade connectivity, and create employment, contributing to broader economic growth,” Karamata said.
He however cautioned that past mistakes made with the running of the liquidated airline should help the government chart a way forward for a new airline.
“However, lessons from past inefficiencies must guide restructuring to ensure financial sustainability, including cost-effective operations, competitive pricing, and strategic route planning. With transparent governance and commercial viability, a revived Air Namibia can become an asset rather than a liability, fostering Namibia’s integration into global markets while safeguarding public funds,” he said.
“The budget will have clarity around the thinking, if indeed Air Namibia is coming back, and how different it will be run in relation to what led to its closure. We will need to understand what the thinking is behind bringing back Air Namibia,” Hei said.
Further compounding its likely revival was whether the government would be happy to fund a business with thin profit margins.
“Airlines have very thin business margins, more so national airlines. The modelling should be, what is the threshold on losses that you can absorb and what component of that loss are you going to be able to absorb through travelling tourists,” Hei said.
“The budget should shed more light in terms of what the thinking is and whether we can afford the funding model for an airline,” he added.
University of Namibia (Unam) academic Omu Kakujaha-Matundu said Air Namibia’s revival would be welcomed on the basis where it can demonstrate a good business case.
“No one will stand in the way of a good national project. The beauty of appraising the viability of Air Namibia is that it is not a new project. The numbers from its past operations are there. The government should interrogate those numbers in the presence of new evidence that necessitates its revival,” Kakujaha-Matundu said.
According to him, should it be shown that the benefits with a revived Air Namibia outweigh the cost of operating without it, then it can be given a go ahead or be revived.
Sound business principles
The revival of Air Namibia would also require it be run on strict business principles, Kakujaha-Matundu said.
“The revival of Air Namibia calls for a comprehensive financial and economic appraisal. Let\'s set aside emotions and let the revival of Air Namibia just like any other national project be strictly determined on firm business principles. There should be little room for error this time around.”
Economic Association of Namibia (EAN) executive director Cons Karamata echoed Kakujaha-Matundu’s sentiments around the airline being run on sound business principles, and said it can help stimulate the tourism sector.
“I support the revival of Air Namibia, provided it is underpinned by a sound business model, strict operational efficiency, and strong public-private partnerships. A well-managed national airline can stimulate tourism, enhance trade connectivity, and create employment, contributing to broader economic growth,” Karamata said.
He however cautioned that past mistakes made with the running of the liquidated airline should help the government chart a way forward for a new airline.
“However, lessons from past inefficiencies must guide restructuring to ensure financial sustainability, including cost-effective operations, competitive pricing, and strategic route planning. With transparent governance and commercial viability, a revived Air Namibia can become an asset rather than a liability, fostering Namibia’s integration into global markets while safeguarding public funds,” he said.
