Gov’t plans underway to revitalise AB
Government is in the process of revitalising the civil aviation sector, Business Monitor has learnt. Plans to engage the private sector in the ownership and management of Air Botswana (AB) are underway to ensure the continued provision of air services in the domestic, regional and international markets as a viable and efficient airline.
Giving updates on the rationalisation of the government portfolio responsibilities last week, President Mokgweetsi Masisi said the rationalisation exercise was guided by the Constitution. “Government will enter into a strategic partnership with the private sector to revitalise and develop Air Botswana, which is seen as playing a critical role in the economy,” he said. With the privatisation, government is also aiming at weaning itself of its financial commitment to the airline.
The national air carrier has experienced running losses since 2008 due to an ageing fleet, high maintenance costs, equipment failure, route redundancy and pressure from competition.
For years, government has been injecting capital into Air Botswana. Last year, Airshare, a Stellenbosch-based aviation operations consulting company in South Africa (SA) that specialises in restructuring and finance, sent a letter of intent to the Ministry of Transport and Communications for the acquisition of the airline.
Airshare was seeking to acquire 70% of the assets, tangible and intangible, owned by AB that are used or unnecessary for the conduct of its business. Previous attempts by SA’s Comair, Airlink and Air Mauritius to buy a stake in Air Botswana did not yield results.
The cash-strapped local airline has also been failing to submit its audited financial results on time since 2019. Late last year, members of the Parliamentary Committee on Statutory Bodies and State Enterprises said failure to submit the results was a pattern with the airline.
Air Botswana has been paying its staff half salaries since May 2020, as the airline’s perennial financial challenges were worsened by the closure of borders and movement restrictions associated with COVID-19.