The government has put the national airline –Air Botswana (AB) up for tender as part of its latest drive to attempt another privatization exercise of the loss-making entity.
The Government kick-started part of the privatization exercise through an Expression of Interest (EOI) invite that has been widely published in the local media this past week. The exercise seeks to consider the preferable option for private sector participation.
Air Botswana’s financial losses over the years, blamed largely on aging 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 the year 2020.
According to Mokaila, the plan entailed organisational restructuring at an estimated costs of P30 million, improved information technology systems (P30 million), as well as re-fleeting.
The Telegraph has been informed that already the airline has sold all of its Jets in a strategy aimed at disposing of an aging 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.
The purpose of the Expression of Interest (EOI) is to introduce the opportunity and to determine the level of interest as well as potential strategic partnerships that could be established with Air Botswana.
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 83 million Pula in the 2016 fiscal year – a development that could trigger some interest towards the airline.