Chart of the Week

To support the revival of Air Namibia, the Namibian government plans to allocate NAD20.0 million for a feasibility study and invest NAD3.0 billion over the next five years.Government hopes this will boost tourism through direct international flights, generate foreign exchange revenue, and create an estimated 700 direct and 500 indirect jobs.However, this plan has raised serious concerns given Air Namibia’s history. The national airline had been making losses since independence, with debt that became overwhelming for Namibia due to its heavy reliance on government bailouts.Previous feasibility studies have failed, and allocating limited funds to what is widely deemed an unsustainable airline leaves less room to prioritise the road network and its conditions — the mode by which the majority of Namibians travel and on which industries depend.In 2023, it was estimated that only 1.2% of Namibians flew. With 65% of employed Namibians earning less than NAD5,000 per month, coupled with a 55% unemployment rate, it is unlikely that struggling households would prioritise flights over basic necessities.Any boost to tourism and employment is expected to be insignificant, as there is no clear market failure to address — commercial airlines already cover a structural gap in Namibia’s air connectivity, making it unlikely that a national airline could compete successfully on an international level.Moreover, the actual economic value of tourism for Namibia lies in the indirect and induced spending it generates, rather than direct revenue — which was never sufficient to offset the inefficiencies of Air Namibia over the past few decades.Airlines are incredibly capital-intensive and high-risk ventures. Globally, state-owned airlines have poor survival rates without ongoing and substantial subsidies, with the industry today largely dominated by private companies.

Chart of the Week

Kommentaar

Republikein 2025-04-30

Meld asseblief aan om kommentaar te lewer

Chart of the Week

Kommentaar

Republikein 2025-04-30

Meld asseblief aan om kommentaar te lewer

MELD AAN

Advertensie