Spirit Not Profit: Air Namibia's Long Haul

Operating a small national airline in Africa is hard work. There are issues around corruption, high operating costs, aircraft procurement, volatility of local currencies against the US dollar, infrastructure, misreporting of Africa as if it's a single entity in the Western press, small fleets with long haul routes and competition from foreign airlines. Profitability is hard to come by. Air Namibia has never made a profit but its keeps trying and keeps flying.

Air Namibia McDonnell Douglas MD-11 V5-NMC Phoenix 1:400 Scale Model Airliner

Namibia is a relatively young nation, gaining independence from South Africa only in 1990. It is a vast nation, the 34th largest in the world, but due to the huge Namib desert, from which it derives its name, it is also thinly populated with only 2.1 million people calling it home. None of these factors bode particularly well for it having a successful national airline, especially in a period when traditional African national carriers have been falling like flies under the weight of mismanagement, corruption and competition from European flag carriers and the ME3. On the plus side Namibia is a stable multi-party democracy with a diverse economy and social stability. No doubt these factors have assisted Air Namibia to keep flying, though it has been far from easy.

Above: Air Namibia Boeing 747SP 1/600 Scale Schabak Die-cast model

Air Namibia can actually trace its history all the way back to 1946, though it was only following independence that the carrier gained its present name. By this time the airline was part of the government owned holding company Transnamib. With independence the pride and economic necessity of long-haul services no doubt seemed impossible to ignore and the airline leveraged its relationship with SAA to lease a Boeing 747SP for a twice weekly service to Frankfurt. Given the nation's relationship with Germany (it used to be German South-West Africa) this was a natural destination though it was joined in 1992 by a weekly London service. Eventually all three flights operated to both London and Frankfurt. Four SAA 747SPs were operated at various times during the 1990s, though there were never more than two at any one time, but the airline was struggling financially. Following a government cash injection of $3.7 million ownerhip passed back to the Namibian government proper.

Air Namibia 767-300ER V5-NMB in 1998

An ex-TACA/Vietnam/Egyptair/Air France 767-33AER (V5-NMB) was briefly leased from AWAS between March 1998 and December 1999 whilst the last 747SP (V5-SPC) was returned in October 1999. It was not however the smaller 767 which would become the new fleet long-haul aircraft but instead the airline would controversially upscale to a new 747-400 Combi.

This aircraft became V5-NMA having first flown in October 1997 but having had its subsequent delivery to Asiana as HL7424 cancelled. The 747-400 Combi was configured to carry 284 passengers in a three-class layout and carried up to 40 tonnes of cargo. The aircraft reputedly cost N$1 billion to operate yet load factors rarely surpassed 50%. Certainly the purchase of a large aircraft like a 747-400 (even in Combi format) for the long thin routes from Windhoek was highly questionable. Unsurprisingly the long haul routes failed to improve on their dismal record of unprofitability. As often seems the case this unprofitability went hand in hand with alleged corruption, which included such things as bribes from aspiring women who wanted to become air hostesses.

Air Namibia 747-400M V5-NMA

The airline nurtured unrealistic dreams of operating to the USA at a time when it still couldn't make money flying to Germany. Initially they filed plans for New York and later Miami and Houston instead. An FAA inspection team didn't find either the country or airline suitable for US services but by then it seems the idea had fallen by the wayside anyway.

Air Namibia's varied long haul fleet over the years

The constant unprofitability was all the more surprising considering that during the 1990s Air Namibia competed with LTU, Lufthansa and Air France but by 2004 only LTU was left. Trouble came to a head in July 2004 when the chairman of the board Vekuii Rukoro resigned and the Ministry of Finance and Board of Directors put the 747-400 up for sale. An A330 was briefly leased but unfortunately a buyer couldn't be easily found and the 747 was put back into service on the Frankfurt route (the London service was dropped). The by then all white 747-400 was finally sold in September 2004 to the Abu Dhabi Amiri Flight but first had to be fumigated for bed bugs! An ex-SAA 747-300 had been registered as V5-TST in June 2004 but never entered service and instead the airline pivoted towards a smaller aircraft in the form of the McDonnell Douglas MD-11.

The ex-LTU (D-AERB) and Swissair (HB-IWR) became V5-NMC in August 2004 but was briefly impounded prior to delivery - hardly a good sign. She was joined in May 2005 by V5-NMD (the ex-Swissair HB-IWH). The long-haul network was expanded to again include London, though this time it was Gatwick not Heathrow. Services now included four times to and from Frankfurt in Germany and three flights to and from London Gatwick in the United Kingdom. As their press release said about the London service:

"Northbound flights will leave Windhoek’s Hosea Kutako International Airport on Tuesday, Thursday and Saturday evenings, arriving London Gatwick the next morning. Return services will leave from the North Terminal Gatwick Airport London on Wednesday, Friday and Sunday evenings, arriving Windhoek the next morning. The inaugural northbound service will be operated on Saturday 2nd July.

 Schedule:
 Depart: Windhoek - 18h40
 Arrive: London - 04h55

 Depart: London - 21h30
 Arrive: Windhoek - 07h45"

Air Namibia MD-11 V5-NMD

Finding passenger MD-11s as late as 2004 was actually quite an achievement and the type was never seen as anything more than just a stopgap. Even prior to the carrier leasing the MD-11s the airline had said it wanted a pair of A340-300s. This finally came to fruition in June 2005 when a 7 year lease agreement was signed with BCI Leasing for a pair of 1994 build A340-311s that had operated with Air France, SABENA and Lufthansa.

Air Namibia Airbus A340-311 V5-NME

The MD-11s left the fleet with the last going in August 2006. Both would become freighters with UPS. The A340s signalled a small turning point for the airline, which between 2000 and 2006 had received N$1.6 billion of state aid to stay in business. This unfortunately still didn't mean any profits however and the London route was scrapped in June 2009 leaving Frankfurt as the only intercontinental route.

A further N$1.6 billion bailout occured in August 2011 looking for break-even by 2016. Further right-sizing of the business was clearly required and following the end of the A340 leases a pair of A330-200s were acquired, in September 2013. These seat 244 compared to the 278 of the A340s. This appeared to be bearing fruit as of 2014 when the airline managed a profit for 4 months running for the first time in its history. Despite this Air Namibia is still struggling for profitability in 2016 but it was far from alone as the continent's airlines were expected to post losses of US$500 million. There doesn't seem much chance of the airline ever making any real money but nonetheless it is providing an important service to Namibians and perhaps that is enough? Regardless after flying 747SPs, 767s, 747-400s, MD-11s, A340s and A330s within the past 20 years it is providing a fine service to plane spotters!

References

1999, April. Air Namibia Acquires Boeing 747-400 Combi. Boeing media
2005. Air Namibia Getting 2nd MD-11. Airliners.net
2005, June. Air Nam leases A343s. PPruNe.org
2006, August. Air Namibia takes leave of MD11 aircraft. The Namibian
2013, January. Air Namibia: A bum investment. Windhoek Observer
2013, August. Air Namibia slowly moves to profitability, halfway through a five-year turnaround plan. CAPA
2013, September. Air Namibia takes delivery of its first Airbus A330. Airbus.com
2014, November. Air Namibia records profit for four consecutive months – at last. New Era
2016, June. African airlines to lose N$8 billion in 2016….Air Namibia needs bold decisions to improve profitability. New Era