Thursday, December 5, 2019

Can Khunwana rewrite Air Botswana’s high-level turbulence history?

The national airline – Air Botswana is best known for two things – Its delicious billington (which forms part of the in-flight snack served to customers) and regular delays or even cancellation of some flights in some instances. The former is subjective, but the latter has left the reputation of this national airline taking a pounding for so many years.

Despite numerous strategic interventions, some on trial and error basis, the airline is beset with operational problems.

As it stands, all eyes, including those of the board chairman – Tebogo Masire are on the incumbent General Manager – Agnes Khunwana and her team to see if they can stop the national airline from flying into a spot of bother.

Even before she was confirmed as substantive General Manager Khunwana was able to oversee significant improvement in the airline’s financial and operational performance. During the period, the airline losses reduced from P165million (2015) P12million (2017).

At the same time, Air Botswana was able to maintain a well-above industry standard, On-Time Performance (OTP). The airline has also achieved a successful IATA Operational Safety Audit (IOSA) in 2017.

….IN HIGH FINANCIAL TURBULENCE

Despite all these positives, one thing that both Masire – a former army man and Khunwane – a Fellow member of the Institute of Global Chartered Management Accountants openly admit is that Air Botswana’s financial situation is dire. The airline’s board of directors at one point pinned its hope in retrenching staff and re-fleeting. Old air crafts were sold and about 200 employees were sent home in 2016 during the first phase of the retrenchment exercise which was sponsored by the Botswana government at P50 million.

None of the two did the trick as Air Botswana’s operations have moved further off the course and the airline remain broke.

As it stands given that the airline has for over a decade been mired in financial difficulties and insufficient revenue generation, it is of strategic importance for the board and management to decide on the way forward.

“There was a suggestion that we should unbundle the airline….take some of the non-co activities such as ground handling services elsewhere. We are looking at creating a separate ground handling entity”, Masire told journalist at the airline press conference held at the Head Office near Sir Seretse Khama International Airport this past week.

Air Botswana’s 2016-2021 turnaround strategy, the success of which hinges on three strategic pillars of – Organisational Restructuring, Re-fleeting and Enhancement of ICT has partially been implemented and it’s ongoing.

Going forward the airline, currently with staff compliment of 450 workers will once again look at retrenchment as one of the ways to cut operational costs and make a “runway” towards profitability. The target is to retain only 210 staff members most of which would be working at the core business.

The plan to procure more aircrafts is not shelved yet. Infact, to successfully implement its turnaround strategy, the airline had directly linked its strategy to a proposed route network that is based on five aircraft by the end of 2021. The ultimate target was to operate two turbo props and three jets.

The board chairperson – Masire was this week however not as optimistic when it comes to buying more aircrafts, atleast in the short term – which also covers the turnaround strategy.

Masire said given the cost of acquiring aircraft and long-haul fleet requirements, the airline continues to grow its reach through code-shares, interline arrangements, joint ventures as well as other forms of alliances with other airlines.

“As you are probably aware, the skies have been liberalised, meaning that other airlines from other countries can start operating into our airports, there is therefore a need to position ourselves to deal with mounting competitive pressures for our own survival”, said Masire.

Despite the likelihood of an offset to Air Botswana’s turnaround strategy due to limited funds to buy two more jets, Khunwana remains optimistic about the future.

The worst is over. The dark clouds are behind us now”

The CEDA and NBFIRA Board member however doesn’t rule out the possibility of any further troubles at Air Botswana.

“We will continue to have setbacks but its part of the industry. What is needed is a strategy to minimise adverse impact on the customer”.

To drive her point home, Khunwane – who once served on the Boards of Civil Aviation of Botswana (CAAB), Legal Aid Botswana, and BOCRA (former BTA) told journalists that the airline’s E170 is currently experiencing a technical fault but due to the ongoing industrial strike at South African Airways, “we do not have support”.

Ideally, Khunwane said, the back-up service for the jet could have kicked in, but the region has limited operators of such service providers.

The problem is further compounded by the problems at South African Airways (SAA), they have engaged all the other South African operators to cover for some of the routes and therefore we do not have support.  We expect the jet to be serviceable before the end of the week”.

The jet in question is reported to have been involved in a hard landing incident in mid October 2019 forcing Khunwane to send it to Kenya for inspection at a cost not less than P100 000.

Apart from the jet, Air Botswana is also operating two ATRs used mainly on the domestic routes. The airline is also looking at making more money by separating from its ground-handling operations and establishing a wholly-owned company. The unit, which Khunwana said will be open to private sector investment, has already secured business from Qatar Airlines, which is set to reach Botswana skies by December 2019. Khunwana and her teams target 2021 as the “year of the skies” in which Air Botswana could be profitable again and possibly lower its air tickets to allow more locals to fly.

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