Gov’t moves to diversify Air Botswana’s revenues

Pauline Dikuelo | Tuesday March 28, 2023 06:00

 

In his last week address at Committee of Supply in the National Assembly, the Minister of Transport and Public Works, Eric Molale said progress has been made as the cargo project is underway.

He added the airline has signed agreements with cargo handling agents at key source markets that include China, India, Indonesia, Singapore, Germany and the United Arab Emirates.

“A lot of effort is required towards revitalisation of our national airline, Air Botswana, as well as our airports,” Molale said. The income stream diversification is an attempt to revive the national airline, which is short of funds as it struggles to keep the aircraft in the skies.

Air Botswana has been suffering running losses since 2008, due to an ageing fleet, high maintenance costs, equipment failure, route redundancy and pressure from competition.

Its struggles were worsened by the pandemic, but it was due to receive P166 million in capital injection from the shareholder for the financial year 2023-2024 which starts in April. Recently the government injected P91 million to the ailing Air Botswana for the restoration of its fleet to full capacity. There were attempts made in 2003, 2006, 2008 and 2017 to privatise the ailing national carrier but all of them failed as each time investors either withdrew or Cabinet rejecting the terms offered.

Molale told Parliament that the restructuring and sourcing of a strategic partner for the airline has started as well as the valuation of the airline as well as its value chain growth project which must precede procurement of a strategic business partner. “In the meantime, government is committed to ensuring that Air Botswana remains a going concern as evidenced by the recent injection of P91 million for the restoration of its fleet to full capacity. This should eliminate complaints about the airline’s performance,” he said.

The latest funding follows the P100 million bail extended by government to the national airline in 2020 when local and regional movement restrictions worsened Air Botswana’s perennial financial troubles. Meanwhile, Botswana attained a rating of 80% compared to Africa’s average of 57% and global average of 67.4% as per the Audit conducted by the International Civil Aviation Organisation in 2022.

As a result of this positive rating, Molale said they have commenced the implementation of the state safety plan to ensure that all aviation operators comply with the required safety regulations.