Thursday, October 28, 2021

‘Vultures’ poised to pounce on sickly Air Botswana

The Chief Executive Officer of South Africa’s Comair, Erik Venter has confirmed that his company wants equity in the national airline, Air Botswana. 

Comair operates British Airways in southern Africa alongside its no-frills brand Kulula.com. 

The interest in Air Botswana by the Johannesburg-based airline follows a recent decision by the government to put Air Botswana up for tender. 

The exercise is part of the government, which is the current sole shareholder’s latest drive to attempt another privatisation exercise of the loss-making entity. 

Through an Expression of Interest (EOI), whose deadline is end of February 2017, the government has invited private airline companies to partner with it to offer efficient and reliable air services to the needs of Botswana’s business and tourism sectors through Air Botswana. 

The EOI, which was largely publicised in the local media, is to determine the level and type of interest there is currently on the market. As such, the government says it is open to receiving proposals for privatisation including ownership, joint ventures, franchising, concessions, partnerships or any other arrangement with commercial air carriers or investors able to competently manage and run the airline.

Sunday Standard has been informed that already Comair has set aside as much as R1 billion for acquisitions and other projects which could be used to buy equity in Air Botswana. 

“We’ll make a submission and see if they are interested in our approach,” Comair Chief Executive Erik Venter told Reuters news agency this week. 

Although previous offers from Comair, South Africa’s Airlink and Air Mauritius have fallen through AB reports that it has since halved its operating losses to P83 million in the 2016 fiscal year ÔÇô a development that has triggered some interest from the likes of Comair. 

The airline’s financial losses over the years, blamed largely on ageing fleet as well a large workforce have prompted a five-year turnaround strategy that includes cutting costs and cancelling unprofitable routes. 

In 2016, the airline discontinued routes to Harare and Lusaka from Gaborone as part of the cost cutting measures. 

In November 2016, the Minister responsible for Transport, Kitso Mokaila, told Parliament that prior to its dissolution, the former Air Botswana board had approved the 2015-2020 strategic plan aimed at turning around the airline by 2020. 

According to Mokaila, the plan entailed organisational restructuring at an estimated cost of P30 million, improved information technology systems (P30 million), as well as re-fleeting. 

Already Air Botswana has sold all of its Jets in a strategy aimed at disposing ageing fleet. 

However, it is said that the disposal of the said Jets has come with huge costs to the airliner as it has since been forced to wet-lease at least one jet from South Africa. 

The estimated cost of leasing the Africa Charter Airline has been pegged at P3 million per month translating into P285 million over the last 19 months. 

The jet was leased in February 2015 and is currently deployed in the Gaborone-Cape Town route.

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