Tuesday, October 19, 2021

Air Botswana awaits shot on the arm from local entities

Fresh information has surfaced that local multi-billion Pula entities are gearing up to partner with the national carrier, Air Botswana.

Government is expected to put out an Expression of Interest (EOI) with the objective to identify an investor with whom it will partner at the cash strapped airline Air Botswana soon.

Sunday Standard can reveal that the country’s multi-billion Pula pension fund, Botswana Public Officers Pensions Fund (BPOPF), is another potential partner to Air Botswana. 

Industry sources are of the view that the aviation industry in Botswana is risky particularly the loss-making Air Botswana. 

Government has previously acknowledged that the national carrier continues to be a problem as the company is running short of an adequate fleet to fly all its routes.

The value of assets belonging to BPOPF increased by 14.5 percent and shot past the P50-billion mark during the financial year 2014/15. In March 2014, total assets belonging to BPOPF were valued at P45.6 billion, a value that increased to P52.4 billion in March 2015. The Fund’s income from investments also increased by 22.3 percent from P5.6 billion to P6.9 billion.

Speculation is also rife that a multi-million Pula citizen owned company (known to this publication)  is also at an advanced stage on the preparation of partnering with Air Botswana.

“Our fear is that some interested companies may not have experience in the aviation industry and could not make a good partnership,” said a source.

It is currently not clear from the government side how much stake of Air Botswana would be the partnership as compared the recent shareholding of another government entity BTC. 

Air Botswana has engaged consultants to develop a five-year strategy for the airline which includes the issue of re-fleeting. Although re-fleeting is not off the cards, government stated that it is now at a point where it has decided to seek other alternatives in partnership with an investor to turn the airline’s fortunes around.

Permanent Secretary in the Ministry of Transport and Communications Elias Magosi said it was difficult to discuss privatisation of Air Botswana when the level of interest in the market has not been established. 

“An expression of interest (EOI) document will be distributed to gauge the level of interest and demand in the market for such an undertaking,” he stated. 

Magosi further stated that the airline management with the Board and Ministry are working together to try and stabilise the operations of Air Botswana including as stated earlier, evaluating options to try and implement a more sustainable operating model.

“This will clearly define the strategic direction that the airline will take and reduce uncertainty,” he said.

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