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Inside the plan to turn Air Botswana around

Seeing change: Mosinyi believes signs of a turnaround are emerging at Air Botswana
 
Seeing change: Mosinyi believes signs of a turnaround are emerging at Air Botswana

Over the years, several attempts have been made to turn Air Botswana around, including plans to bring in a strategic equity partner, privatise the airline, shave off the ground crews and refleet.

The plans have met with minimal success and shocks such as COVID-19 and the broader economic challenges have clipped the airlines’ wings while high profile, flashy competitors have eaten up market space from Air Botswana.

Bao Mosinyi is leading attempts to turn Air Botswana around. The aviation veteran enjoys the unique experience of having top-level experience of both sides of the coin, having served as the CEO of the Civil Aviation Authority of Botswana, prior to his appointment as Air Botswana General Manager in February.

He speaks to Mmegi. Mmegi: In your assessment since arriving at Air Botswana, what are the airline's fundamental challenges and what are the possible quick wins in terms of solutions?

Mosinyi: There's really two big problems. The first is that we are definitely quite inefficient. We have way too many delays and cancellations which has in turn reduced our confidence level amongst the travelling public and then our load factors as a result are very low. So we fly around with empty airplanes and then we don't make money and it's primarily because of how inefficient we are.

Our inefficiency really comes down to two things or I should say the delays and the cancellations were caused by two things. One is that we did not have enough ready airplanes like an airplane to cover up if something went wrong. Even though we have enough airplanes, we didn't have enough ready airplanes.

Then the second part of it is that at any point in time we did not have enough current flight crew to fly the airplane. As you may know, company pilots need to go for current and simulator training every six months and you find that we have enough pilots, but you don't have enough that are current.

So you have enough airplanes, not enough ready to fly. You have enough pilots, but not enough current to fly and then you start having to change schedules and then there are then delays and cancellations.

So that is really the most pressing issue and the second concern is the level of debt. Of course when you are not doing well, you end up not making money and end up owing everybody.

The debt restructuring becomes a long-term project but the most important and pressing one is improving the efficiency which is what we are working on and I would think those who fly or observe how we do things could probably start to see some improvement in the last few weeks. March was generally a good month with very few delays and cancellations. So we are starting to be on the right path.

Mmegi: Could you shed more light on the turnaround strategy at Air Botswana?

Mosinyi: If I was to sum it in one word, it's efficiency. That is our entire strategy. So, the way we're looking at it is we want in the next few months to just get this airline to a point where we do what we're supposed to do the right way.

That we leave on time to get the passengers where they're supposed to go on time, give them a decent meal on the way and have their bags there with them when they arrive. And all that is geared towards ultimately getting our fair share of the market back. So, the strategy right now is really summed up by operational efficiency.

When you look at aspects of that, I always say any strategy I believe has to have four aspects. The first aspect is the product plan. What are we planning regarding the product itself? This is what we talk about being on time, being consistent, giving customers a decent meal, getting them to where they want to go, when they want to be there with their bags.

The second thing is the finances and we're certainly in very bad shape. So, we need to restructure the debt and create some liquidity.

The third aspect is the marketing because we can make all these improvements and we have started to see things getting better, but we need to market the product, which means a lot of things. For instance, two weeks ago, we had a meeting with the travel agents association because those are the people who sell the tickets. We’re also able to also create different types of packages that would entice somebody to sell an Air Botswana ticket.

We've seen how even our rates, how we've expanded the rates and also expanded how we price our tickets. So, we're looking at a lot of innovative ways to encourage people to fly us. That is on the marketing side.

Then lastly, the most important thing in any type of turnaround is the people. You need to have a people plan of what you do with the people. It starts all the way from the top and here at the airline, there's no single substantive director; every director is acting. So, we are in a race to very soon have all these positions have substantive people and that's when things will start to step along.

You see a lot of people having issues, HR issues, and you don't have a director of HR and that doesn't help. So, we need to look at the people and it starts with filling up critical positions and then having the organisation run the way it should from a governance standpoint.

At this point, we are not going to get into any structural separation of any sort. Any such plans are all in abeyance because the focus right now is making what we have efficient. We want to move to something that resembles an airline that is efficient.

Mmegi: What level of support do you have for this turnaround strategy from the board and from the shareholder?

Mosinyi: Certainly, the shareholder is doing its part. We have to acknowledge that there is ongoing financial support, perhaps everybody would prefer it to be more, but that's where the country is and we understand the limitations that the country has. If it wasn't for the current government support, we probably wouldn't even afford to pay salaries and so, we appreciate the help that the government is extending.

When you look at the board, when you get into an organisation where there's a lot of dysfunction, there's a lot that needs to be done in the background to get to a point where things make it convenient for you to take the next step. So, I have to say I'm really grateful that there was a board before I came in and I’m grateful for the background work that the board has done before I came in. If I had come in before the board started doing all the other things that they were doing in the background, it would have been even much tougher.

That for me is the biggest support you can get and I fit into how they are looking at things. Of course, now that I'm here, they've stepped back a little bit, to look at things more in a governance way and to move away a little bit from the day-to-day, but we are very much aligned on where we're going.

Mmegi: Kindly shed more light on the ratio of pilots to planes to flights to overall efficiencies. What are the plans around optimal operations? For instance, the number of pilots that you have versus the number of planes that you have versus the number of flights that you have. Are you looking at those?

Mosinyi: It's a difficult one to share and make it cleaner because there are many complexities with it. In essence, I would say, Air Botswana has six aircraft and our pilot numbers are in the 30s. However, of the six airplanes, only three are currently flying. We have a number of pilots that are currently not current and are just at home.

The other two aircraft are currently in Namibia and when these two aircraft come back soon, there will be five aircraft. The last aircraft, the E-170, is down here at our hangar and it needs major engine work.

So, that one, it's difficult to say when it will be up because it's a money thing and it's quite a bit of money.

Mmegi: Now, in the years that the national airline has struggled and battled and fought, other competitors have crept on to the local skies and they're even offering flights that challenge domestic routes. They’re challenging these routes that Air Botswana has enjoyed dominance on. How do you deal with that?

Mosinyi: I think we, especially coming from CAAB where increasing connectivity for the country was one of the things in our mandate, even here, the connectivity in the country is not at a level where it should be. So, looking at expanding the economy and expanding our tourism offering, we need more players. I still believe the way to position yourself is that if you are efficient and you lift your brand, you will get your fair share.

The other thing is that some of the airlines that fly in don’t handle themselves. I'll give you an example in Gaborone you look at Ethiopian Airlines, you look at South African Airways, basically, when you go to the counter to check-in, it's our people doing that. When the flight comes in, the people taking care of your bags, taking care of the aircraft, it's all our people.

So, to us, it's also a benefit because they give us handling contracts and you find that always in aviation, there's different ways of working together. You can extract value out of other players coming in and as long as you put yourself together and are able to compete and get your fair share, I don't think it should concern us much.

And the other issue is that when you have better connectivity, if something happens and you are not able to offer your flight for any reason, then you have somebody leaving within the hour, instead of having somebody to wait for the evening or wait for the following day. So, in that case, it becomes, it's a good thing for the customers.

Mmegi: Botswana retain their pride in the national carrier and would prefer to fly Air Botswana than other competitors. When someone flies to or from their holiday in Kasane, they want that local biltong and a St Louis, not from a South African airline! However, they do demand competitive pricing, they want reliability, safety, comfort. What is Air Botswana's promise to this clientele?

Mosinyi: In my last month and a half here, as you talk to stakeholders, this is a recurring theme. The biggest concern for all these people is reliability and it just comes down to that, that you need to be there on time. You should not cancel my flight. Almost every person has a sad story about what happened to them because of Air Botswana.

And this is our strategy, to get ourselves to a point where we are very efficient so that as we go on all these engagements that we're going on, we’re not talking much about the past, but asking for forgiveness for what we have done and putting the promise there. The important thing is we have to make the promise, so that if you give us another chance, you will not suffer the same fate.

So I believe we will get to a point where those that have been loyal to the airline, and Batswana in general, regain the confidence that when you fly Air Botswana, it will get you there in time and comfortably.

Mmegi: Air Botswana has been the subject of several attempts at a turnaround over the years, including proposals for privatisation at some point. There was a call for private equity investors at some point to come on board and I think there was even a shortlist of leaders. Can you take us into your confidence on why you believe this latest attempt will succeed where others have failed? Why should this strategy you have now succeed as opposed to different attempts that have been made in the past?

Mosinyi: I would say, first of all, you always gain some of the confidence from what we have done. I think the record at CAAB speaks for itself, where we found that organisation and where it was by the time I left four years later; getting private equity investors and flying to different faraway places and increasing routes.

The important thing in our current short-term strategy is efficiency. You want to be efficient to gain the confidence of the flying public, so that you become the airline of choice flying in this area. With that, then you have created something of value if and when government decides to then partner in whatever ways with whoever.

But you cannot do that with an airline that has huge debt, an airline that cannot be on time, an airline that cancels all the time, an airline that has more than half of the pilot's home not current, an airline that has the majority of its airplanes sitting on the ground. So to me, the most important thing is gaining the confidence of the flying public, but creating value in this airline. Then we can talk about what we need to do next.

One never wants to look at what others have done. But when you look at how the organisation has performed over the years, and you hear some of those ideas that have been brought on the table, you wonder what value government would have derived from this, when there was basically no value in this organisation. The organisation was hugely in debt, and nobody would, in their right mind, would really put much of their money in an entity running the way Air Botswana has been running the last few years.

So I think the important thing is the focus. Focus on the right thing so that we transform the organisation to a point where we can start talking about those things.

Mmegi: It appears that Air Botswana troubles may not be unique to the airline. There's many African national airlines that seem to struggle and even get liquidated. What is the challenge with the African skies, especially for the airlines owned by governments? It appears when countries gained Independence, all of them tried to establish a national airline and many are in trouble?

Mosinyi: I think it's tough to talk in general but I have to say for African airlines the bigger problem is the cost, because you look at fuel, we pay more for it than anywhere else in the world. Again, one of the major costs in aviation is aircraft maintenance and the parts and everything related to these things is bought in US dollars. It's a big part of the cost of the airline.

Also, if we talk about African airlines in general, the third big cost or one of the bigger costs is taxes, because these are taxed quite a bit. But here in Botswana we can't claim that third one; it is not a problem or relatively speaking, our taxes are very low regarding travel.

The challenge for us is efficiency, I believe or the mindset. We still have the mindset of an entity that doesn't need to stand on its own because the government is there to help. So I think, for me, I think that is the biggest problem.

If we move away from that mindset, which unfortunately is a process, we, I have no doubt that we should be able to stand, for the most part, stand on our own.

Mmegi: Just to pick your opinion on this: should every country in Africa even have an airline? Is that what we want? Is that what we need for aviation on a broader level on the continent?

Mosinyi: So, my personal view is that the role of a national airline is to develop routes and once the routes are developed, you get out of the way. When you are in countries where aviation is developed, my view is that you don't need a national airline. As such, I strongly believe here in Botswana, where we are now, we need a national airline.

The country is not connected. When you start looking at how do we fly to Selebi Phikwe, how do we fly to Kasane directly, how do we consider flying to Maun, you need a national airline, something where the government intentionally wants to do it. So, if we were to get a point where all these routes are developed and they make money, then my personal view is that the national airline should always step out and let the private sector do it.