Massive bail-out for Air Namibia

Namibia’s cabinet has given the embattled Air Namibia a multi-million dollar lease of life that is expected to pull the national airline out of its financial morass, ‘The Namibian’ reported on Monday. The money will be used to wipe out a huge debt, improve baggage handling equipment at the airport and provide operational cash. The massive infusion will also boost creditors’ confidence in the airline and ease worries that those doing business with Air Namibia could start to demand upfront payment for goods and services if the company’s financial woes had continued for much longer.

Finance Minister Nangolo Mbumba confirmed the bail-out but declined to give details. “Yes, it is true.
Cabinet has given authorisation to improve Air Namibia in terms of financial grounding, operations and to stabilise its flight schedule,” Mbumba said. The money could be paid directly from state coffers or the Government could try to raise it on the stock market.

The top management and board were reportedly working on a document aimed at reducing operational costs, which will be done mainly through the “restructuring” of management. The company has around 30 managers who, according to insiders, take up nearly 30 percent of the wage bill. Sources say the company has at least three layers of management which, at times, leads to poor administration.