National flag carrier, Air Namibia, is in talks with the Namibian Airports Company (NAC) to settle a debt of almost N$200 million in landing fees and airport taxes owed to the airport parastatal.
This comes after The Namibian reported earlier this month that NAC was threatening to ban Air Namibia from operating from its airports and to drag the national airline to court over the unpaid fees.
NAC Chairperson Rodgers Kauta was quoted by the daily as saying that the debt that it is owed by Air Namibia has almost paralysed the airports company’s operations by making it difficult for them to deliver on their statutory mandate.
Kauta also said the Air Namibia debt was causing “an exceedingly challenging cash flow situation”.
Public Enterprise Minister, Leon Jooste, confirmed to the Windhoek Observer that Air Namibia and the Namibian Airports Company had started negotiations this week.
He also said that the national airline is currently auditing past invoices to determine the exact amount of fees which they owe NAC.
“Air Namibia is auditing past invoices to check for accuracy and together with NAC they will then have to negotiate a settlement agreement,”Jooste said.
Jooste could, however, not say how much the national airline was prepared to settle at this stage as the negotiations had only just started.
An NAC official, who did not want to be identified as he is unauthorized to speak to the media, said Air Namibia was forced to come to the table after a recent Cabinet deliberation on the debt.
“Cabinet discussed the fate of Air Namibia regarding debts to us. They owe NAC passenger fees which they collect from passengers including security charges, landing fees and rental for offices at all our airports.
“They are supposed to pay over our taxes like other airlines do, but they use the money for their own operations and we do not get it on time,” the official said.
Namibia Airports Company is responsible for the development and management of eight airports in the country.
The company’s main objectives are to ensure the arrival, surface movement, parking or departure of aircraft, the servicing of aircraft, including the supply of fuel and lubricants, ground handling of aircraft, and making sure that passengers, baggage and cargo are well managed.
Both NAC and Air Namibia are State-owned enterprises under the custodianship of the Ministry of Works and Transport.
Over the years, Air Namibia has always stressed that NAC would not exist without them.
In January 2016, NAC told the Windhoek Observer that it was owed N$75 million by Air Namibia in unpaid airport taxes and passenger fees.
The loss-making airline, which was allocated N$695 million in public funding in the 2016/17 budget, received only N$436 million from treasury in the 2017/18 financial year.
It remains to be seen where the money to settle the NAC debt will come from, especially after the Ministry of Works and Transport indicated last month that Government wouldn’t be able to pay any subsidy to the company, urging the airline to secure its own funding for key monthly expenditures, such as the leasing of planes.