Air Namibia Seeks International Ally as Cuts Spell End to Losses

Aug 20, 2014 4:48 am ET

Aug. 20 (Bloomberg) -- Air Namibia said it’s seeking an international ally as the state-owned carrier makes progress in ending losses, aided by cost cuts, higher ticket prices and the addition of more efficient planes.

With the African company breaking even on a monthly basis since April and aiming to do so for the full year, the focus is on seeking a strong strategic ally, Chief Executive Officer Rene Gsponer said yesterday in an interview in Johannesburg.

“In the long run we need to have a partnership to avoid shrinking to a regional player,” Gsponer said. “We need a strong international partnership.”

Air Namibia already has a code-share agreement with Kenya Airways Ltd, sub-Saharan Africa’s third-biggest carrier, a special purchase deal with Deutsche Lufthansa AG, the European No. 2, and an accord with Turkish Airlines. Long-haul flights serve Frankfurt -- Namibia being a former German colony -- with short-haul links to South Africa, the country’s last ruler before independence, as well as Angola, Zambia and Zimbabwe.

The carrier, in the first year of a three-year turnaround strategy also involving the scrapping of unprofitable routes, will seek to address non-flying costs by outsourcing operations such as baggage handling, ramp services and catering, Gsponer said. It has taken a fresh approach to revenue management, aided by International Air Transport Association consultants.

Air Namibia’s fleet of 10 aircraft includes two Airbus Group NV A330 wide-bodies and four single-aisle A319s, of which it took delivery in the past two years, helping to cut fuel and maintenance costs by about 30 percent, the CEO said.

The Windhoek-based airline had a loss of 600 Namibian dollars ($56 million) similar to that a year earlier, according to Gsponer. Gross profit has surged 51 percent this fiscal year following a 17 percent gain in passenger numbers, he said.