‘Airports Company not bankrupt’

‘Airports Company not bankrupt’Assets of N$2.7 bn The NAC last year utilised its existing reserves as well as some assistance from the government to fund its operational and capital expenditure obligations. It has never had to borrow from any financial institution and/or capital markets in its entire period of existence from inception to date. – Leon Jooste, Public enterprises minister Despite the bleak global economy and low air traffic, public enterprises minister Leon Jooste on Thursday assured that the Namibia Airports Company (NAC) is financially solvent and remains able to pay its debts.

Jooste said this while responding to questions in the National Assembly by Popular Democratic Movement parliamentarian Nico Smit on the insolvency of NAC.

He said as of 31 December 2020, NAC’s total assets were valued at N$2.7 billion, and its current assets were N$253 million, whilst its obligations to third parties were only N$91 million.

“It is noteworthy to take cognisance of the fact that NAC’s financial position is undoubtedly solvent, so much so that it has never had to borrow from any financial institution and/or capital markets in its entire period of existence from inception to date,” Jooste said.

He said it is common cause that the revenue that has been generated by airport operators and other players in the aviation industry has been considerably diminished on account of the Covid-19 pandemic’s devastating impact on the aviation and cognate economic sectors and in most countries, airport operators have relied on government assistance as well as the use of existing reserves.

RESERVES

This, he said, unfortunately, is the same situation with NAC as over the past year NAC has utilised its existing reserves as well as some assistance from the government to fund its operational and capital expenditure obligations.

“Although the effects of Covid continue to be felt, NAC is optimistic that its financial situation, which is not dissimilar to that of other airport operators worldwide, will gradually improve once travelling gradually normalises,” he said.

Jooste added that the fact that airlines such as Ethiopian Airways and Eurowings have resumed passenger services and the Turkish Airline commenced cargo operations, while others have increased the frequency and expanded their operations at airports operated by NAC, Westair and Airlink being cases in point; with the likes of Condor, TAAG and Comair having conveyed their intention to likewise resume operations in April/May 2021 means that NAC’s financial position is exponentially improving, commensurate with the increased aircraft movements.

He said non-aeronautical revenue generated from retail activities at NAC airports is also expected to correspondingly increase in light of increased passenger numbers, which will enable NAC to collect more revenue to buffer its reserves, thereby continuing to be a going concern, as has always been the case. - Nampa