Wednesday, June 19, 2024

Air Botswana gets more capital injection

The Botswana government says a lot of effort is required towards revitalisation of Air Botswana, with focus on diversification of revenue streams, prepping the airline for possible privatization, according to the minister of Transport and Public Works.

Last week Tuesday, when presenting the ministry budget proposals for the 2023/2024 financial year in parliament, Eric Molale said they are working on a turnaround strategy for the struggling national air carrier. Part of the revenue diversification includes the cargo project, which the minister said is well underway, with the airline already signed agreements with cargo handling agents at key source markets such as China, India, Indonesia, Singapore, Germany and United Arab Emirates.

“The restructuring and sourcing of a strategic partner for Air Botswana has started in earnest. The valuation of the airline as well as its value chain growth projects, which must precede procurement of a strategic business partners, have commenced,” said Molale.

The value chain development projects include an aviation School which is scheduled to be operational by October; expanding the maintenance and repairs facility aimed at attracting third party clientele to utilise the airline’s maintenance facility for a variety of aircraft types; and pursuing the Public Private Partnership (PPP) model for ground handling company as well as a travel agency to afford competitive fares to the airline’s passengers.

Molale said the government is committed to ensuring that airliner remains a going concern, kept afloat by the recent injection of P91 million to restore the fleet to full capacity. Additionally, under the current budget, the ministry will avail P166 million to Air Botswana. The minister said the funding will eliminate complaints about Air Botswana’s operations, which have been plagued by inconsistences that frustrate customers, in particular, delayed flights.

While the safety of Air Botswana has been a subject of national discourse, Molale said Botswana attained a rating of 80 percent compared to Africa’s average of 57 percent and global average of 67.4 percent as per the audit conducted by International Civil Aviation Organisation (ICAO) in 2022.

“As a result of this good rating, my Ministry has commenced the implementation of the State Safety Plan (SSP) to ensure that all aviation operators comply with the required safety regulations,” he said.

The minister also revealed that they will be undertaking improvement of Air Traffic Services (ATS) surveillance coverage of Botswana airspace project next year. The objective of the project is to improve safety and security of the domestic airspace and ultimately attract more airlines, including over flights.

“It will not only ensure aviation safety and security, but also attract investors and tourists into the country whilst also increasing revenues through over flight fees. My Ministry intends to go on a continuous improvement mode to sustain all these achievements and initiatives for the overall good of our economy,” Molale said.

Air Botswana expanded its fleet sin 2018 after it purchased two ATR72-600 and 70-seater Embraer E170 jets. Prior to that, the airliner was operating three ATR 42-500s and one ATR 72-500, which it has since retired.

The new aircrafts were also part of efforts to boost the Air Botswana’s attractiveness to investors. The loss making national air carrier has been subject of privatization for over a decade, with failed attempts in 2003, 2006, 2008 and most recently 2017.

Other than re-fleeting, Air Botswana operations were supposed to be split into four units: passenger services, cargo services, ground handling facilities and engineering/maintenance. All the units will be privatized in the short run except for the passenger services privatized later.

RELATED STORIES

Read this week's paper