AIR TRANSPORT

For now we are fairly comfortable with what we have.

THEO NAMASES

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NAMIBIA

In late 2012, Air Namibias very existence was brought into question by a wave of industrial action, leasing disputes and an increasingly impatient shareholder. Having successfully weathered the storm, chief executive Theo Namases is now plotting a course for calmer waters. Martin Rivers reports.

Namibia in the comfort zone

ews that Air Namibia was trying to back out of a 12-year leasing agreement for two Airbus A330s sent shockwaves through the southern African nation last year, coming alongside repeated warnings from the government that its losses had become unsustainable. The wide-body jets had been billed as a key step towards turning around the airlines loss-making Frankfurt route, which is currently served by two fuel-inefficient A340s. Though Namases would not comment on the circumstances of the dispute, she confirmed that the A330 leases with Intrepid Aviation are back on track. The two aircraft will arrive in September and November of this year, allowing the A340s to be withdrawn. Alongside the recent introduction of four A319s and four Embraer ERJ-135s, they will bring Air Namibias re-fleeting process to completion. For now we are fairly comfortable with what we have, Namases said. Fleet renewal was one of the recommendations in the recently crafted business plan by IATA; it has identified certain objectives and recommendations. As a team, we believe that if we can introduce those recommendations as quickly as possible, then we will meet the requirement of reducing our dependency on government. Although more fuel-efficient aircraft will enhance Air Namibias wide-body operations, under-utilisation looks set to be an on-going problem. Frankfurt is the carriers only longhaul route, meaning that its A340s are routinely parked on tarmac for 10 hours. An aircraft on the ground is not making

money, Namases noted. But we will not just run hastily into opening up markets if we have not done a thorough assessment and are not convinced that it will yield positive results. Her reluctance to enter new European markets reflects the burdensome balancing act of flying direct to Frankfurt a politically vital, but economically testing, link for the former German colony. Noting that the flag-carrier lost N$200 million ($20 million) on the Frankfurt route last year, Namases said that she is carefully considering various options. These include the possible operation of open-jaw services with other European destinations. But she reiterated: We do not want to rush into anything. You have to keep the cost in mind. For now our biggest objective is to stabilise the airline with the routes that we are currently operating. She added that Frankfurt frequencies would continue to fluctuate in line with seasonal demand. We will just consolidate what we have and then see how best we can increase utilisation, especially of the A330s. One long-haul option tentatively being considered is the introduction of flights to London Gatwick Airport. This would most likely come in the form of a fifth-freedom connecting service via Accra in Ghana Air Namibias only mid-haul route. We have a very close eye on Accra, Namases said, noting its weak load factors. We are struggling to get the revenue ahead of cost on the Accra route. An alternative approach would involve Continued flying to Accra via the Nigerian metropolis of on Page 28 Lagos. Strong demand for the fast-expanding

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city would strengthen load factors on the initial leg, but Nigerias government has, at times, been reluctant to grant bilateral access to foreign flagcarriers. With both fifth-freedom solutions presenting challenges, therefore, Namases admitted that Accra might have to be dropped from the network. Alongside incremental changes to the route network, Air Namibia is equally determined to implement a wholesale strategic review of its revenue generation models. The airline has appointed a revenue management expert on a consultancy basis until the end of 2013, and Namases voiced optimism that his contract would be renewed. One of the sad things that we realised was that we did not have a proper revenue management specialist in the building and, as a result, we could not keep up with what our competitors were doing. That is in the past now, she said. IATA called for a host of other operational improvements in its business turnaround plan for Air Namibia. Though Namases kept the details under wraps, she insisted that more than a third of the groups recommendations have already been enacted. Its yielding positive results, she added. You can already see the improvement. qqqqq Echoing sentiment from across the continent, she said strategic partnerships with other African carriers would deliver the largest gains. Air Namibia is working to expand its very good relationship with Kenya Airways, as well as opening new discussions with Ethiopian Airlines. Closer to home, Air Zimbabwes upcoming service from Harare to Lusaka presents an opportunity for possible codesharing, Namases said, noting that Air Namibia has also just launched the route. The chief executive emphasised that all strategic opportunities will be evaluated hand-inhand with the government. Following the period of uncertainty in 2012 the shareholder is now committed to sustaining the national carrier, and she described its insistence on financial improvements as a fair request, which I fully agree with and support. One near-term indication of the success of the turnaround plan will be the 2013/14 financial result for the Frankfurt route, which Namases is aiming to improve by 25%. Its a very cautious target because we are also keeping in mind the costs associated with the new fleet, she warned, voicing her reluctance to pin down projections at this stage. Its better to make the improvement, let the shareholder see it, and let the nation see it; we want the results to speak for themselves. Thats the philosophy that we are trying to enforce in Air Namibia. Lets do the best we can under the circumstances. But what is comforting is the fact that we have the support of our government, despite the difficulties that we are going through.

Airline looking for

Air Namibia has the rather odd accolade of serving the second most sparsely populated country on Earth, with just 2.2 million people occupying a space the size of France and Germany combined. Now, as Victoria Moores reports, it has a simple mission to promote tourism and provide essential air links for its homeland which is 80% desert.
ttracting visitors to a hot and dry desert aircraft comprising two A340-300s, four A319climate with erratic rainfall may sound like 100s and four Embraer ERJ-135s. From a difficult feat, but Air Namibia has plenty Namibias Windhoek capital, which literally assets at its disposal. translated from Afrikaans means windy corner, The Republic of Namibia is a country of stark the airline serves six domestic routes Katima, natural beauty, rich in natural minerals, Luderitz, Mulilo, Ondangwa, Oranjemund, wilderness and wildlife. It boasts the red-sanded Rundu and Walvis Bay and nine regional Namib Desert, the oldest desert in the world, destinations linking Namibia with Angola which has accumulated the worlds highest sand (Luanda), Botswana (Gaborone and Maun), dunes over its 80 million years of existence. It is Ghana (Accra), South Africa (Cape Town and also home to the worlds largest underground Johannesburg), Zambia (Lusaka) and Zimbabwe lake, intriguingly named Dragons Breath, and (Harare and Victoria Falls). It operates one longthe 500 million year-old Fish River Canyon, the haul service, that vital Frankfurt link, which second largest in the world. delivers the majority of Air Namibias revenues Against the backdrop of so many million years and available seat kilometre (ASKs). of history, Air Namibia seems quite the infant With Angola and Zambia to the north, the with just 67 years of history under its belt. The Kalahari Desert and Botswana to the east, South airline was formed in 1946 as South West Air Africa to the south and the Atlantic Ocean to the Transport and has, over time, undergone several west, these air links are vital to Namibia. The name changes and amalgamations. Namibian economy basically rests on four When the government acquired a majority stake pillars: mining, agriculture, fishery and in 1982, Namib Air was designated as the tourism, said Air Namibia general manager republics national carrier, prompting the 1989 commercial services Xavier Masule. Air launch of Boeing 737-200 flights between Namibias role is to promote these industries and Windhoek, Cape Town and Johannesburg. Namib sectors, primarily tourism development and Air then became todays Air Namibia in sustenance, as well as being a vehicle for 1990, when the republic gained promoting trade. The independence from South Africa. Namibia is home to Africas In that same year it launched tallest elephants, the largest freeNamibian long-haul services to Frankfurt, roaming cheetah population, economy basically which remain significant, rooted endangered black rhinos, lions, in Namibias status as a German leopards, zebras and hyenas. rests on four pillars: colony between 1885 and 1914. The country is a prime source mining, agriculture, Skip forward 23 years and for gem-quality diamonds; it is a fishery and today government-owned Air major uranium producer and is Namibia operates a fleet of 10 rich in gold, granite, lead, marble, tourism

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