Air Namibia Seeks International Ally as Cuts Spell End to Losses

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 (LHA), the European No. 2, and an accord with Turkish Airlines. (THYAO) 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 (AIR) 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.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Simon Thiel at sthiel1@bloomberg.net Christopher Jasper

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.