The national airline has, perhaps for the first time, admitted that ticket prices for domestic flights are uncomfortably expensive, and that the heavily anchored Frankfurt international route is in need of diversification.
In addition Air Namibia’s acting managing director and chief operations officer, Rene Gsponer, says although the national airline has successfully managed to increase passenger revenues and operational efficiency, its aircraft fleet is underutilised and continues to impose a financial burden on the company.
“I am not happy with the way we are using [the aircraft], we need to utilise them more frequently,” he says of the Embraer passenger jets and intercontinental A330-200 planes.
“[Domestic air fare reduction] is route specific [but] if we introduce longer operating hours at [Eros] airport and more flights per day we could easily reduce air tickets by N$500. It is a long term plan, a commitment to the country,” he says.
The self-admission came on the day the International Air Transport Association (IATA) announced its recommendation on how the liberalisation of African air markets, of which Namibia is one, could double African airlines’ revenues, increase passengers and routes, and create employment through spin-offs in the tourism and hospitality sector.
The IATA study has found that a liberalisation of air markets in southern African countries has the potential to decrease Namibian airfare by 25 per cent, double Air Namibia passengers to over one million through new destinations and increase the number of flights. In addition, Namibia stands to benefit from an additional 10 600 jobs and N$1.17 billion additional GDP per year.
The IATA report appears to have infused Air Namibia with hope, with Gsponer yesterday saying they are working on re-developing the route to West Africa through Accra in Ghana and Lagos in Nigeria.
“It is possible that in a year’s time we will be up and running,” he says, adding they project “to make money in 15 months” from the first day of operation. For now though the plan is in the discussion stages but talks, which include diplomatic representatives of the two countries, are positive, he said.
Air Namibia’s previous attempts to diversify into Africa’s air market did not end well, with the cancellation of the Accra route, twice. Its code sharing agreement with Kenya Airways remains under-utilised. The Accra route cost Air Namibia N$600 million in losses. “We needed to learn from what has been done,” Gsponer says of the new model into Africa.
Air Namibia also says it needs to increase its routes presence in Europe, by developing route arrangements with different European airlines to be one of the African air carriers feeding passengers into Europe via different points of entry.
“This report demonstrates beyond doubt the tremendous potential for Namibia if the shackles on aviation are taken off. A potential five million passengers a year are being denied the chance to travel within Africa because of unnecessary restriction on establishing air routes,” says IATA’s vice-president for Africa, Raphael Kuuchi.
IATA commissioned the ‘Value of Aviation for Africa’ econometric report, to see why African countries with airlines are struggling when compared to European airlines, even when Africa’s middle class has the largest growth rate and the perfect customers for airlines. Namibia, Angola and South Africa were the three southern African countries that were studied in the report, along with nine other African countries.
“But for the full benefits to be realised, Namibia should work to encourage all African states to embrace the Yamoussoukro agenda,” Kuuchi said. The Yamoussoukro Decision of 1999 committed 44 signatory countries to deregulating air services and to opening regional air markets to transitional competition. The African countries have never fully implemented the decision though.