Under immense pressure to stay afloat, cash-strapped Air Namibia will have its planes grounded. This is after it failed to secure enough funding to remain solvent, voiding its air licence, the transport authority said.
Air Namibia, which operates 10 aircraft on continental and one international route, with a staff of close to 800. It needs around 8 billion Namibian dollars ($469 million) to stay afloat, but only got a tenth of that in last month’s budget.
“This is scarcely 12% of the amount stated as needed by the management of the airline,” the head of the Transport Commission, Eldorette Harmse, said in a statement.
Without its air licence, Air Namibia is no longer allowed to operate commercial flights. It can however undertake humanitarian evacuation and repatriation flights under its non-scheduled air services licence. This is valid for the duration of the State of Emergency due to the coronavirus.
The firm’s financial woes pre-date the COVID-19 pandemic which has ravaged air travel around the world due to the stand-still in tourism. It has failed to produce financial statements in recent years, a requirement of Namibia’s Air Services Act.
In January it faced serious allegations around safety, operations, and its finances, contained in an audit report published by German airline Lufthansa. It has yet to resolve those issues.
Air Namibia also owes its main creditor, the now-defunct Belgian company ChallengeAir SA, 12.3 million euros ($13.88 million). The European firm has applied to the Namibian High Court to have the carrier liquidated.