Air Botswana privatisation hits brick wall
Lewanika Timothy | Tuesday March 26, 2024 06:00
The state-owned national flag carrier has been drenched in financial dire straits for many years with the airline failing to break even due to low sales and high maintenance costs. Responding to a question in Parliament, Serame revealed that privatisation efforts have been stalled since 2016 with the World Bank roped in to assist in feasibility studies.
“An attempt to privatise Air Botswana was made in 2016, but was not successful due to the loss making nature of the entity. Currently the entity is going through a process of identifying a strategic partner in preparation for privatisation,” she said. The national airline is scheduled to receive a bailout of P121 million in the 2024-2025 financial year, which follows an allocation of P166 million in the current year, also for a bailout.
The funding is part of the ongoing government rescue missions for the airline, which has faced decades of unprofitability exacerbated by the global travel bans resulting from the COVID-19 pandemic. Delivering her ministry’s budget request on Monday, Serame stated that most of the funds allocated to the struggling airline would go towards infrastructure improvements and maintenance.
“The air projects to be catered for include maintenance of airports, improvement of surveillance of Botswana airspace, upgrading of air navigation services infrastructure, installation and improvement of airport security systems, mandatory engines replacement, and procurement of airport safety equipment as well as improvement of existing airport security and safety,” she said. Air Botswana’s development funding in the Transitional National Development Plan (TNDP) has been revised to P702.7 million over the two years of the plan, from an initial allocation of P133.6 million. In 2019, the national airline stated it planned to trim down 210 employees from 450 with the majority of departures headed to a new subsidiary, to focus on its core mandate.
It also retrenched in 2016 and 2017, while also getting rid of the old planes and refleeting. However, it has suffered running losses since 2008, due to an ageing fleet, high maintenance costs, equipment failure, route redundancy, and pressure from competition.