Airlink 'Stabbed' Itself In The Foot

Staff Writer
South Africa's Airlink lost its bid to acquire a 49 percent stake in Air Botswana (AB) last week because its officials would not "give-and-take" in their negotiations with the Botswana government.

It would seem the lone bidder was so convinced it had the airline deal in the bag that it found it unnecessary to adjust its stance on various aspects on the table.

For instance, Airlink negotiating team was advised not to abandon Botswana colours on the new airliner, but the South African firm went ahead with its proposal to drop the AB livery.

Airlink proposed a flag displaying the colours of the South African flag on the aircraft tail, seen as the most prominent part of an aircraft, with only a small Botswana flag on the fuselage.

According to a summarised report that guided Cabinet's decision to reject the Airlink deal, the South African negotiating team was also "enthusiastic" to abandon AB's commercial system, despite being warned that such a decision would not augur well with the powers that be.

According to the report, AB has over the years built up various commercial systems, including the Galileo reservation system, the Mona Lisa revenue optimising system and e-ticketing.

But Airlink's proposal was to replace all the systems with systems used by SAAL, including the Amadeus reservation system, the SAA revenue accounting system and the Star Alliance Loyalty Programme. Airlink were requested to reconsider abandoning AB's commercial systems, but they would not relent.

The South African company had proposed to take the Botswana national airliner without paying a cent or thebe and had proposed that Airlink would not touch any of AB's property, including aircraft.

It turned out that the South African airliner was going to use smaller aircraft in its business, something that did not go down well with the Botswana government. The report elucidates:

"The government reviewed the suitability of SAAL proposal

to use J-41 aircraft instead of Air Botswana 's fleet of ATR 42s.  The J-41 has 29 seats whereas the ATR 42 has 46.
"The J-41 also has a less spacious passenger cabin and limited baggage carrying capacity.  J-41s are considered suitable for low traffic domestic routes but less suited for busier international routes.

Government's view is that ATR 42 is a very suitable aircraft for Botswana's requirements."
Besides fears that the airliner would still prove unprofitable under SAA, Cabinet also feared that operations of the airliner would now relocate to South Africa, effectively meaning that Botswana would have no airliner of its own.

"South African Airways is a 10 percent shareholder in SAAL. SAAL would operate under an SAA franchise arrangement, and some of its commercial systems and headquarters functions would be outsourced to SAA, including passenger reservations.

Government is fearful, though SAAL denied this, that SAAL would get least priority after SAA and SAAL when it comes to bookings and seat allocation."

On the issue of SAAL franchise, the report says: "There is a fear that if SAA were to terminate the franchise arrangement this might adversely affect operations of the proposed joint venture."

It would also seem that the bidder did not do much to convince government that retrenchment would be handled in a sensitive and responsible way as some 120 workers of the 300 employed at AB were going to be left in the lurch, according to Airlink's proposal.

"SAAL proposed the retrenchment of all of AB's 300 staff with payment of retrenchment packages and then about 180 would be hired by the JV, while the remaining 120 would have to seek alternative employment," the report adds.



Purging the DIS

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