HILKA BIRNS / KASANE, BOTSWANA

Business plan for troubled carrier approved by government but could face union ire

Business aviation services specialist ExecuJet has signed a memorandum of understanding (MoU) to take a 40% stake in a partially privatised Air Namibia.

South African-owned ExecuJet is a multinational group involved in aircraft sales and finance, executive air charter, aircraft management, aviation services and maintenance.

The Namibian cabinet approved a new business plan for the troubled carrier in August, which allows Air Namibia's debt of N$1.4 billion ($134 million) to be ring-fenced from 1 November for six-months, enabling the partially privatised airline to start with a clean balance sheet.

The business plan calls for a 30% cut in Air Namibia's 200-strong workforce, and new chief executive Gernot Riedel is confident that the government will push through the layoffs despite opposition from Namibian trade unions.

Completion of the ExecuJet deal is not assured, however, with Namibian unions earlier this year scuppering a similar equity deal with regional carrier South African (SA) Airlink. That carrier still has a MoU for a 40% stake in Air Namibia, but no investment has been made. Under that deal, privately owned Namibian aviation company Comav was also due to acquire 15%, trade union group Labour Investment would have taken a further 10% and employees 10% (Flight International, 26 March-1 April). That deal would have resulted in South African Airways (SAA) becoming a 4% shareholder in Air Namibia through its 10% stake in SA Airlink.

Sources say the deal collapsed because of Namibian opposition to SAA gaining interests, although the ostensible reason was union opposition to privatisation.

Riedel says the Namibian government will initially retain 60% of the carrier, with more stock to be sold to investors and staff later.

Meanwhile, Riedel is implementing a new fleet strategy. The airline's Boeing 747-400 will be leased to Air Gabon, and Air Namibia is in talks with Airbus, Boeing and leasing company GE Capital Aviation Services for the lease of two Airbus A330s or Boeing 767s. The airline has already wet-leased one A330 for three months.

The Tanzanian privatisation authority, the Parastatal Sector Reform Commission, has approved South African Airways' acquisition of 49% of Air Tanzania for $20 million. The Tanzanian government is expected to sign the deal next month.

Source: Flight International