Namibia Air to enter tough market five years after Air Namibia was shut down
Airlines in Africa expected to make an average profit of just N$7 per passenger in 2026.
TIRI MASAWI
Namibia is taking another gamble on a national airline.
Five years after the government shut down debt-ridden Air Namibia, it is backing a new carrier, christened, Namibia Air.
The airline received its operational licence last week.
But its launch comes with a heavy financial history.
The closure of Air Namibia marked the end of an institution that had gobbled up N$11 billion in government bailouts over two decades.
By the time it was liquidated in 2021, Air Namibia had accumulated about N$3 billion in debt against assets of only N$931 million.
The airline had never generated a profit during its existence.
Of its 19 operational routes, 15 were consistently loss-making.
Now, five years later, the government is trying again.
The new airline is entering an aviation industry where profit margins are already razor thin.
The International Air Transport Association (IATA) expects airlines in Africa to make an average profit of just N$7 per passenger in 2026.
That represents a net profit margin of only 0.2%.
The figure raises questions about whether Namibia can make a national airline work without another heavy burden on taxpayers.
A BILLION-DOLLAR WARNING
Air Namibia’s history stretches back much further than 1994.
Its roots date back to 1946, when South West Air Transport was established.
After several changes over the years, the airline became Namib Air in 1978.
It was later taken over by the government.
In October 1991, after independence, Namib Air was renamed Air Namibia.
The airline was finally shut down in 2021 after decades of financial and operational problems.
Over the two decades before its closure, it had swallowed N$11 billion in government bailouts.
Despite the massive support, it failed to become profitable.
It also faced intense financial pressure from a long-running legal dispute with Belgian company Challenge.
The dispute stemmed from a 1998 Boeing 767 lease agreement.
The settlement was roughly N$253 million.
Air Namibia’s history now hangs over Namibia Air.
The question is whether the new airline can avoid the same fate.
‘WHY NOT NAMIBIA?’
The Transport Commission of Namibia chairperson Joshua Kaumbi last week said the decision to grant Namibia Air its licence was driven partly by national pride.
“Even the smallest country in the region, Eswatini, has Air Eswatini; those countries with a GDP smaller than ours boast of national airlines, also Malawi Airlines. When we granted the licenses to Namibia Air, we said, ‘Why not Namibia,” he said.
Kaumbi said the national carrier would open routes for trade and tourism.
It would also create jobs and connect Namibians to opportunities across the region and the world.
“I am reliably informed that the Transportation Commission of Namibia, was but one important step in releasing our bird into the sky belonging to all humans, small and big.”
“It is now up to other agencies, under close supervision, to take the process forward at above normal speed.”
“An airline of our own is something to be proud of as a nation and a nation-state, and it is a trust we must all carry with the care it deserves,” he said.
But economists and aviation experts are warning that national pride alone will not keep an airline flying.
‘SWIMMING AGAINST THE TIDE’
Economist Robin Sherbourne said Namibia Air is already haunted by the government’s record of running commercial entities.
“The new airline is seriously haunted by the government’s poor track record of running commercial entities,” Sherbourne told Namibia Business Review.
“Just look at our commercial Public Enterprises, especially ones that operate in competitive markets and you will see the answer.”
Sherbourne said governments across Africa have struggled to run airlines effectively and profitably.
He blamed political interference and the failure to allow airlines to operate independently.
“I have not seen the feasibility study that shows Namibians how much of the taxpayers’ money will be spent on this airline but it appears half baked and what happened to the idea of bringing in private shareholders?”
He also questioned where the money to establish Namibia Air would come from.
“What lessons have we learnt from Air Namibia and the billions we spent keeping it afloat? Governments generally are not good at running airlines. Where is the money going to come from to finance Namibia Air? The government is already highly indebted. Is this the best use of resources?”
“Repairing potholes in Walvis Bay might bring higher returns,” he said.
Sherbourne said Namibia Air’s survival would depend on the government’s commitment to allow qualified people to run the airline without undue influence.
“If the government appointed the best people and let them get on with it I’d be more optimistic but most things the government touches become political and commercial considerations go out of the window.”“They should publish the feasibility study so taxpayers can see the case for public money being invested in an airline,” Sherbourne said.
‘NOTORIOUSLY DIFFICULT’
The same concerns have been raised by Nelson Tuhafeni Kalangula, Member of Parliament and shadow minister of works and transport for the Independent Patriots for Change.
“Running a state-owned airline on a profitable basis is notoriously difficult, as evidenced by the histories of Air Namibia, South African Airways, and Kenya Airways,” Kalangula said.
He said aviation entities often suffer when political mandates override commercial viability.
“While a national airline can serve as a strategic asset to boost tourism, trade, and regional integration, it cannot be sustainable if it acts as an unbudgeted state welfare program or a sinkhole for public funds.”
He said Namibia Air needs a lean, market-driven business model.
It should focus on profitable regional routes.
It should avoid costly long-haul operations that drain state resources.
Kalangula also wants the government to disclose details of the reported N$20 million feasibility study.
“The nation needs to know how much they are to spend on this. Moving forward under a veil of secrecy without full legislative scrutiny breeds distrust,” he said.He questioned whether enough had been done to rebuild public confidence.
“Has enough been done to rebuild public confidence? No, sufficient work has not been done to restore public trust.”He said the government should establish a Presidential Commission of Inquiry into the liquidation of Air Namibia.
“To genuinely build confidence, the government must establish a Presidential Commission of Inquiry into the liquidation of Air Namibia,” he said.Kalangula also called for strict vetting of people appointed to the new airline.
He said public officials previously linked to governance failures, negligence or financial mismanagement should not be recycled into technical committees or executive positions.
“Rebuilding trust requires total transparency, strict accountability, and zero tolerance for political patronage,” he said.He also called for qualified Namibian aviation professionals to be brought into the new airline.
“Namibia possesses qualified pilots, aircraft engineers, safety officers, and aviation regulators many of whom were left stranded by Air Namibia’s closure.”“A national airline that excludes qualified Namibian experts cannot be a source of national pride,” he said.
Kalangula said appointments must be based on merit, technical qualifications and aviation experience.
He said route selection, fleet acquisition and staffing must be guided by commercial viability rather than political considerations.“Exploring well-structured equity or operational partnerships with established aviation players can mitigate financial risks to the taxpayer and bring in global operational expertise,” he said.
RECURRENT CHALLENGES
Economist Kluas Schade said Namibia Air will have difficulty competing while providing services that meet customer expectations.He warned that the new airline could face many of the same challenges as Air Namibia.Air Namibia incurred constant debt and failed to generate sustainable revenue, he said.
“One of the challenges Air Namibia faced was that the two planes on the long-haul flights were parked half of the time either at Frankfurt or at Windhoek.”“They incurred costs during this time but did not generate income.”Schade said large airlines can absorb such costs more easily.That is more difficult for a small airline operating only a few planes.“The challenge for the new airline is to ensure that planes are in the air but also meet the demand of customers regarding their preferred time for travelling,” he said.
He said state-owned airlines must resist political interference.“State-owned airlines need to resist political interference regarding routes, schedules, and prices and operate based on commercial principles.”Schade also warned that Namibia has a small pool of domestic expertise to operate commercial airlines.“If the airline cannot attract domestic expertise, it needs to source expertise from the region or even beyond.”He said this applies to management and pilots.
Namibian pilots have taken up jobs abroad following the liquidation of Air Namibia.
“They might not be readily available for new opportunities in Namibia. Hence, the airline might need to employ pilots from abroad,” he said.
AIRLINES STRUGGLING WORLDWIDE
South African aviation expert Linden Birns said Namibia Air is being launched at a difficult time for the global aviation industry.Airlines worldwide are struggling to maintain profitability.
The situation is particularly difficult in Africa.IATA forecasts that African airlines will make an average profit of just N$7 per passenger in 2026, compared with about N$36 per passenger in 2025.The global average is expected to be about N$76 per passenger in 2026.
Birns said African airlines face much higher costs than airlines in other regions.
Jet fuel can account for up to 40% of some airlines’ costs.Insurance is another major cost.
Weak foreign exchange rates also add pressure because aviation is priced and traded in US dollars.
According to Birns, success or failure will depend on efficient management and the right routes.“For any new airline to become commercially viable and profitable, what matters are the commercial imperatives and business case for the venture, the nature of the home market and the other markets it aims to target.”He said the airline’s business model, network, schedule and fleet plan will also be critical.Namibia’s geographic size presents another challenge.
Birns said only a small percentage of the population can afford to travel by air.“Where some state-owned airlines have tripped up before is when they are expected to fulfil development and commercially profitable mandates.”“There should be clarity on the mandate from the start.”
He said political interference could ultimately determine whether Namibia Air succeeds or fails.
The airline must distinguish between operating for ego, prestige and political symbolism and operating on sound commercial principles.
GOVERNMENT CONSIDERS CODE-SHARING
The government says it understands the challenges.Earlier this year ministry of works and transport executive director Jonas Sheelongo said the government is considering code-sharing agreements with other airlines.“We are well aware of all the challenges being raised but yes we will consider all the options on the table to make this work,” Sheelongo said.
He said the government has been open about its engagement with Ethiopian Airlines over a potential partnership.It has also engaged Botswana counterparts.Code-sharing allows two or more airlines to share the same flight.One carrier operates the aircraft.The others sell tickets under their own flight numbers.The arrangement can help airlines expand their market reach and offer destinations beyond their own networks.Sheelongo said the government remains committed to running Namibia Air on business principles.“We must be clear what we mean when we talk of political interference. It is not possible for an airline to run and its shareholder has no say.“Yes, the shareholder will have control but the commitment is to run this airline on business principles,” he said.
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