5 February 2013

Namibia: Air Namibia Dumps Business Plan

AIR Namibia board chairperson Harald Schmidt has ignited bitter criticism by allegedly dismantling the ailing airline's business plan for which N$1,2 billion over three years has been earmarked.

Senior managers at the airline are said to be "complaining bitterly" over the plans to "dismantle" the billion-dollar business plan adopted by Cabinet in 2011.

Finance Minister Saara Kuugongelwa-Amadhila was quoted that year as having hailed the business plan as worthy enough for the State to "bite the bullet" with the additional financing, which included the purchase of two new Airbus 319-100 planes.

One Airbus, which insiders say arrived when the airline had no money, arrived some months ago and staff are currently being trained on it.

One source said he fears for the future of the airline as Schmidt and his new board are not only "undoing and aborting" the business plan, but are also "illegally toppling" Air Namibia managers.

Schmidt is accused of having "appointed himself as the de facto MD [managing director]" while he has "appointed" the International Air Transport Association (IATA) consultants responsible in part for the business team "as his executive management team".

"Surprisingly, the same IATA consultants he has appointed are the same who worked on the business plan that they are now undoing and they are the ones who recommended [it] to Cabinet for the business plan to be approved," the source said.

The source continued: "It is clear that the IATA consultants are just after making money in Namibia and want to stay as long as they can. I wonder if Home Affairs issued work visa[s] for IATA to come and work as Air Namibia's new management because when they came we were told they were here to transfer skills to Namibians and help implement the business plan. Now they are doing something totally different. When will our managers rise up and fight?"

While reluctant to respond to the allegations made, Schmidt nonetheless acknowledged that a new business plan "has to be placed on the table" after the Cabinet-approved business plan was not "upheld, respected and managed".

He said Ministry of Finance permanent secretary Ericah Shafudah has made it clear that the airline is to be placed under an emergency turnaround, the consequence of that is to devise a new plan.

"The going concern must literally be salvaged from coming to a crash and to allow a turnaround with a new business plan," Schmidt said.

He further suggested that "those with the fiduciary responsibility" to oversee the turnaround strategy of the approved business plan have "failed dismally" to do so.

Schmidt further said he did not know what the allegation that he and the IATA team are 'toppling' the Air Namibia managers is based on, saying it would be more helpful for everyone to "take hands" and jointly focus their energy on turning the operations around and achieve efficiency in the airline "as soon as possible".

"We all would like the airline to continue but this can only happen if a strong foundation is laid. Some are prepared to work, some are messing with the wrong issues. The general public out there has absorbed lots of disappointments, they have lost a lot of money because of services provided, or not," Schmidt said.

Schmidt added that the IATA consultants were initially not supposed to work on the airline's turnaround strategy, but that it happened while they are on assignment to assist with the improvement of the airline.

"For a long time the staff at Air Namibia had carte blanche to take decisions. If they were smart enough they would have been able to bring about a turnaround without the interference of consultants and there would not have been a need for a turnaround strategy. Then they would have been able to run and especially bring the business plan to fruition, but they failed dismally to do it," Schmidt said.

The IATA consultancy contract comes to an end in the middle of this year.

"There is a start and end date for the consultancy, and because of the limited time available, they [IATA consultants] are prepared to work beyond their working hours and over weekends. Some work around the clock," said Schmidt.

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