Acting Managing Director is optimistic about the future of the carrier and aviation in Africa.
How would you assess Air Namibia’s performance in 2016?
We did well. We won a number of awards and came second in the Skytrax Best Regional Carrier category for Africa.
It was a year in which we were very busy revisiting the fundamentals that affect our business.
As with every business, it was about reducing the cost structure and increasing the revenue streams.
It always helps if you have a positive outlook in this industry
And as with every business, if you’re willing to do the hard work and you have the commitment of your shareholder, then you will reap the benefits in the end.
It always helps if you have a positive outlook in this industry. Profit margins are thin in this industry but it pays to be optimistic.
This is especially as Air Namibia, like many other air carriers, has financial challenges.
Of course, we were vulnerable to geopolitical realities. Angola, for example, is a challenging market and there were issues in the past with the timely repatriation of funds.
What are your targets for 2017?
We have some big competitors in the regional market but we will try to grow our regional footprint.
The five-year strategy approved by the Cabinet calls for regional growth. I’m really happy with that. You can only be as good as your planning and the homework that has gone into that planning. We need to leverage off our strengths, in deciding exactly how to grow.
We want to step beyond our current boundaries of the network we have and we’re interested in all African regions in terms of growth potential. But we are concerned about the geopolitical developments in some areas and how this may influence air transport
We want the Air Namibia customer experience to speak of the beauty of the country
We will also be focusing on the customer experience. The aim is to localize the product more.
We want the Air Namibia customer experience to speak of the beauty of the country and to capture the country’s spirit, in terms of offering superior on-board service. We will emphasise these issues in our staff training.
And, as ever, we will look at ways of improving safety.
We will be ensuring we have all the relevant certifications in place for our operations. There will be an IATA Operational Safety Audit this year.
Are you anticipating any changes to fleet to service longer-haul flights?
We have 10 aircraft. Two Airbus A330s, four A319s and four Embraer 135s. There needs to be commonality in the fleet to make operational costs.
But it is possible that we will look at the Embraer 145 rather than the 135, simply because the demand is there and we don’t want to leave passengers behind, especially on the domestic routes.
The new routes we are operating, such as Gaborone in Botswana and Durban in South Africa, are within the range of the Embraer fleet. And other possible destinations—including Accra in Ghana—are viable with our Airbus A319. East Africa is also within range of the A319. The A330s will continue on the Frankfurt route.
Overall, the fleet we have is suitable for the destinations we serve or are considering serving in the near future.
Are codeshares important to your strategy and also to your efforts to improve the quality of your customer service?
Air Namibia has an interline agreement with Lufthansa and a codeshare with Kenya Airways which are key for us, primarily because it enables us to expand the extent of our network. We benefit from the onward connections these carriers supply but also from the traffic they bring to Windhoek.
That access to additional traffic and additional markets is crucial to the business and we will be looking at furthering the number of partnerships we have.
And it’s true that our partners are also helping to define our customer experience. We worked with Lufthansa Consulting, for example.
What was interesting was how they related Lufthansa’s efforts to stay relevant, when low cost carriers came on the scene, to our situation.
There were parallels in how you maintain the brand and quality service while looking to improve efficiency across the board. That is something we need to achieve and their insights were very useful.
Can African infrastructure support your efforts to improve customer service?
There are some airports in the region—O.R.Tambo in Johannesburg is the obvious example—that have spent large amounts of funds to maintain international standards.
We do need to offer a degree of self-service in the modern age
Elsewhere, including domestically in Namibia, greater investment is needed to secure a better customer experience. In Windhoek, there are no air bridges, which can cause inconveniences to passengers during the rainy season. Check-in and boarding is also all done manually.
Of course, there are cost implications with major improvements but we do need to offer a degree of self-service in the modern age.
The investment would certainly pay off in the longer term and it would enable us to use the staff in a more meaningful way that improves customer service.
Does the cost of fuel and fuel supply reliability affect your airline?
Fuel prices in Africa are generally much higher than in the rest of the world. While fuel is no longer such a major business expense for other carriers, for Air Namibia it is still 35%–40% of our total expenditure. Airlines flying to Africa from other regions clearly have a big advantage because of this.
We have a reasonably good deal for our fuel at the moment and the supply is good. Longer term, we are looking at hedging, especially if fuel prices go up.
Because, despite everything, we have to consider that, at $50–$60 per barrel, fuel prices are good compared with where we were a decade ago.
What more can be done to help African carriers improve safety?
Air Namibia has been IOSA-registered since 2007. We were last audited in June 2015 and our current registration runs until September 2017.
In general, there is a misperception about African safety
IOSA is a global standard and Air Namibia meets that global standard as do many other African carriers.
We are safe, and we are a safety-focused airline. We are transparent about our approach and we are credible.
What is needed is for more African States to endorse best practice in safety, to follow ICAO and IATA standards.
Many already do that though and, in general, there is a misperception about African safety. It is not an African problem but a problem with a few individual countries in our region or carriers in our sub-region.
Do you believe in the potential of the African market?
Absolutely. Of course, I am biased but the potential is clear as the market is huge. It will take the full implementation of the Yamoussoukro Decision to realize this potential, however. There are too many impediments at the moment. We must have full liberalization.
Intra-African air fares are often too high. It can cost less to fly to Europe from Africa than it does to fly from one African country to another. There are visa restrictions too and poor infrastructure can play a part in the lack of air travel between states.
The fear with African liberalization is often that the big carriers will swallow up the smaller carriers
These obstacles must be overcome, otherwise Africa will lose the benefits of air connectivity and the African carriers will suffer. Traffic to Europe from Africa is largely on European-based carriers.
The fear with African liberalization is often that the big carriers will swallow up the smaller carriers. But that isn’t the picture we see elsewhere.
Everybody has a part to play. Carriers of different sizes and with different business models can feed each other’s networks and thrive by growing the continental share of air travel rather than just their individual share of it. Yes, it would be competitive, but it would also be a great opportunity for African airlines.
Africa needs to recommit to the Yamoussoukro Decision. It needs to walk the talk.
How will the ICAO agreement on carbon offsetting affect Air Namibia?
Namibia is a Member State of ICAO and so played an active part in the discussions.
Climate change affects Africa too and so a global solution for aviation emissions is the correct response. We will be happy to participate in the Carbon Reduction Scheme for International Aviation (CORSIA) in due course.
It remains voluntary to begin with and there are exemptions. Socio-economic factors remain highly relevant to any market-based measure.
Air Namibia is working hard on the other pillars of the industry’s environmental strategy too. We want to be more environmentally efficient in all aspects of our operations and the fact that we have six new aircraft in the last four years proves that. We are in full agreement with the aim to achieve carbon neutral growth from 2020.
What does it take to be a modern airline CEO?
I have an aviation background and I think that understanding the context in which the industry operates is still important. Aviation is a complicated business, it is highly regulated and highly political too. That isn’t the case with many other industries.
Running an airline is complicated but it should be run the same as any other business: with diligence and care.
Having said that, I don’t agree with the mystification of the industry. The insistence on industry insiders has kept many good leaders out of aviation and we have suffered because of it.
Yes, running an airline is complicated but it should be run the same as any other business: with diligence and care.
It would be good to have experience of leading a major company and to understand that no two days are the same.
I never get to switch off my phone and I am always wondering how the operation in Frankfurt or Harare is getting on.