Outsourcing a possibility for Air Namibia

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WINDHOEK – Air Namibia may be considering outsourcing one or more of its numerous departments in an effort to increase profitability.

Sources within the airline indicate that ramp and cargo staff based at Hosea Kutako International Airport have already been informed of the likelihood of outsourcing their work and the possible repercussions.

However, the outsourcing exercise is not expected to influence wages and benefits of employees in the affected departments.
However, when questioned on the outsourcing exercise Air Namibia’s chief operating officer and acting managing director, Rene Gsponer, said: “We are not yet ready to start assessment of business opportunities but we will communicate when we are ready to start with the project.”

Gsponer recently remarked that one way to improve the national airline’s revenue is to improve operational integrity. This he hopes to achieve with a modern fleet together with streamlined operations, processes and procedures.

In addition as Air Namibia refines its human resources structure to comply with the regulatory framework, Gsponer noted, “the company needs the right people in the right places.”

In fact, the number of employees at Air Namibia has steadily been reduced from 745 to a current staff complement of 700.
According to the turnaround strategy the airline should ideally employ 595 staff, which Gsponer said would be achieved through strategies such as early retirement and voluntary exits.

While Air Namibia managed to increase its operating revenue for the period April to December in both 2013 and 2014, by 19 percent, the national airline’s top management recently admitted that it still needs to increase its revenue stream to attain operational profitability in accordance with the turnaround strategy.

Air Namibia reported operating revenue of just over N$1.2 billion in 2013 compared to just over N$1.4 billion in 2014.
In fact, last year Air Namibia broke several revenue generating records and reported overall 2014 revenue of about N$2 billion.

However, during a recent overview of business operations Gsponer noted that the airline is still working on operational profitability, which it hopes to achieve within the next two years as stipulated in the government approved turnaround plan.

Air Namibia’s general manager: commercial, Xavier Masule, recently confirmed that between November and December 2014 visitors from Germany declined 11 percent, US visitors declined 7 percent and visitors from the United Kingdom declined by 5 percent. The declines were mainly attributed to a global Ebola scare which Masule estimated could have resulted in revenue declines of about N$50 million.

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