Air Namibia – Go Big or go home
By Karl Lichtenberg
Consultant and Scholar
Air Namibia has two options. Either it takes up the challenge and try to become a successful company on the African market, or it only focuses on the regional and domestic markets.
Personally, I love flying Air Namibia. It makes me proud our country hosts an airliner with friendly personnel and great service, that is on par or even better than large European and Gulf carriers. What I am not proud about is; that since 2000 the Namibian Government paid Air Namibia more than N$6 billion in subsidies and it at this point owes Namibia Airports Company more than N$250 million.
Recently pressure by politicians and the public at large has increased on Air Namibia, to become less of a burden for the taxpayer and more cost efficient and competitive or face liquidation. These demands however, do not go far enough.
For starters, as a State-Owned Enterprise (SOE) Air Namibia is notorious for its inefficient operations and lack of business development and innovation. There also has been criticism that its management is fairly inexperienced when it comes to aviation and that this inexperience has resulted in some costly mistakes for the airline.
It speaks volumes, that it has taken government 10 years and a cash-crunch to pressure Air Namibia into releasing an annual report, which they are required to do by law anyway. This emphasises the need for government to privatize the national carrier, not necessarily completely and all at once.
This would not only save government expenses and improve the airlines chances of survival, it would potentially make it successful and us, Namibians proud.
A major problem in Air Namibia’s operations are far too long turnaround times. This especially is the case for the A330-200 planes serving the international connection to Europe. Turnaround times on this route generally exceed 12 hours, while competitors have turnaround times averaging one to two hours. Turnaround times are crucial in aviation, as time spend on the ground is money lost.
To become successful on the African and international market, Air Namibia should look to Norwegian as an airline that has successfully adapted long distance budget travel. For this they would need a lot of fuel efficient aircraft and rapidly expand their network.
They could for example try to connect Latin America, via Windhoek, to Asia, this is the shortest connection between the two continents. They would also need to strike deals with many regional budget airlines, to feed their long-haul flights.
At this point no long-haul budget airline is present on the African market and Air Namibia has the opportunity to fill this gap. The African aviation market alone and connecting it to other international markets, has huge potential.
Should they opt to only focus on the domestic and regional markets, they should again look to budget airlines around the world and adapt their strategies. Keeping costs and turnaround times to a minimum is the only way airlines can still be successful. A decrease in ticket prices would result in increased customer numbers, increasing the occupancy of flights.
For both strategies to work, it is crucial that Namibia joins the Single Aircraft Air Transport Market and compels other African countries to do the same.
A single market would decrease costs for airlines substantially, thus leading to lower ticket prices and ultimately result in increased customer numbers. Air Namibia has the chance to become a leading and successful African airline, be it regional or international. Will it take this chance?