Air Namibia removed from Travel Association
The Association of Southern African Travel Agents (Asata) has informed its members that Namibia's financially troubled flagship airline, Air Namibia, has been suspended from all integrated surveillance system (ISS) operations. The suspension comes after the airline failed to pay outstanding amounts in relation to the Billing and Settlement Plan (BSP) and International Air Transport Association (Iata) clearing house (ICH) settlements.
Asata in a statement on Tuesday said: "In accordance with the passenger agency conference resolution, the airline has been suspended from all ISS operations." Asata is a representative forum which promotes professional service for its members and their clients in the travel industry. The agency represents over 90% of the travel industry in terms of market share.
Its membership is voluntary and includes South African retail travel agents, travel management companies, wholesalers and suppliers of travel-related products and services. Meanwhile, the Iata clearing house is meant to provide fast, secure and cost-effective billing and settlement services in multiple currencies for the air transport industry. It enables the world's airlines and airline-associated companies' 'suppliers' to settle their passenger, cargo, universal air travel plan and miscellaneous/non-transportation billings by applying the principles of set-off/netting, thus reducing cost, risk and increasing speed.
The ICH also offers a dispute mechanism of billings and protection in case of default, bankruptcy and the cessation of operations. Asata's chief executive officer, Otto de Vries, told a South African publication this week the airline's suspension was a warning that it is not able to meet its financial responsibilities. This in turn placed the airline in a high-risk category. He further said agents should tread with caution when making bookings, further suggesting that customers should rather book directly with the airline.
Air Namibia's chief executive officer, Theo Mberirua, said the suspension does not entirely affect domestic flights, but the agents for regional flights have been given links to use for bookings. "For domestic and regional flights, we are not too worried. This clearing house issue... we do not foresee it having a big impact on domestic and regional flights, because we have been flying domestic for the past couple of months and nothing goes through the clearing house. That will not be affected," he said.
Meanwhile, Air Namibia will today oppose a High Court application in which Belgian lawyer Anicet Baum wants the national airline to be declared bankrupt and liquidated. In the application earlier this month, Baum, liquidator of Challenge Air, is claiming the airline is insolvent as it is unable to pay its debts, and is asking the court to order it to be wound up.
Baum says Air Namibia acknowledged in a settlement agreement with him in December last year that it owed Challenge Air an amount of 18,2 million euro (about N$350 million), which it undertook to repay in instalments until September 2021. To date, the airline has paid 8,2 million euro (about N$158 million) of that debt, and has not honoured the settlement agreement, Baum is claiming.
In an affidavit filed in response to an application to have it liquidated, Mberirua denied that Air Namibia is "commercially insolvent". The chief executive officer said parliament appropriated N$984 million in the current financial year, and to date, the company has only used N$248 million. "Thus the amount of money that has not yet been utilised by Air Namibia is about N$736 million. This amount is sufficient to pay Air Namibia's debt claimed by the applicant," he said.
Mberirua said the government has been paying for the airline's debts when such debts became due, and when the company calculated liabilities cited, debts which are not necessarily due were cited. For this reason, Air Namibia entered into reviewed payment terms with certain creditors due to the impact of the novel coronavirus.
"Air Namibia made a similar proposal to the applicant on 25 March 2020 for revised payment terms. Suffice that I record that the applicant did not respond to the said letter," he said.
He said the airline has also requested the government to provide the amount sought by the applicant in these proceedings, saying a restart plan has been submitted. Mberirua said in the plan, the airline has requested N$56,9 million to be used to pay Challenge Air and other creditors.
"Further, Air Namibia requested an amount of N$192,7 million to restart its operations. Of this amount, Challenge Air will be paid the outstanding monthly instalments set out in the settlement agreement," he said.
