Air Botswana Corporation is Botswana's state-owned national flag carrier, with its headquarters located in Gaborone.[5] It operates scheduled domestic and regional flights from its main base at Sir Seretse Khama International Airport.[6] Air Botswana has been loss-making for several years, and there have been various attempts to privatise the company, and frequent changes to the corporation's management and board, so far without reducing the losses.[7]
History
Formative years (1972–1986)
Air Botswana (Pty.) Limited was founded on the 2nd of July 1972 to succeed two failed former national airlines: Botswana National Airways (1966–1969) and Botswana Airways Corporation (1970–1971).[8] Air Botswana Holdings was responsible for the ownership and leasing of aircraft, and served as the holding company for Air Botswana. During the early formative years, Air Botswana (Pty.) Limited acted as a contractor for numerous flight services, which were contracted to South African Protea Airways, via a local subsidiary, Air Services Botswana.[9][10]
The contract with Air Services Botswana for operation of the airline was not renewed, and in 1981 British Airways was awarded a contract for the operation of the airline for a six-year period. Also in 1981, Botswana Development Corporation was formed as a part of Air Botswana Holdings, with the corporation being tasked to acquire an aircraft for the airline to lease. The Fokker F27 was again chosen, and because of a lack of their own trained crews, the airline seconded crews from Comair and contracted maintenance out to Safair Freighters. In 1983 a Lockheed L-100-30 Hercules was leased and Air Botswana Cargo was formed to operate cargocharters, and when South African Airways ended services to Lesotho and Swaziland, a second F27 was acquired and services to Maseru and Manzini were inaugurated. A sixteen-seat Dornier 228-200 was leased in December 1984 from Kalahari Air Service, with the latter flying and maintaining the aircraft for Air Botswana.[10] The 57 million pulaSir Seretse Khama International Airport opened on 10 December 1984, seeing Air Botswana operating from the airport.[9] By the end of 1986, the route network included Gaborone, Francistown, Johannesburg, Harare, Lusaka, Manzini, Maseru, Maun, Selebi-Phikwe and Victoria Falls.[10]
Two ATR 42–230 arrived in 1988, leading to the sale of the Fokkers, and the first BAe 146 arrived in November 1989. The BAe 146 entered service on 12 November on the Gaborone-Harare route, operated five times per week in conjunction with Air Zimbabwe, along with other destinations of the network of the airline in southern Africa. The airline also entered into block-seat arrangements with international airlines, including an agreement with British Caledonian which provided seats on the Lusaka-Gaborone sector of the London-Lusaka-Gaborone service.[10]
In December 1992, the government enacted the Control of Smoking Act (1992), and Air Botswana became the first company in Botswana to respond to the act by banning smoking on all domestic flights in 1993, which was later extended to all flights in the Southern African Development Community region in 1995.[14] Whilst the years 1988 to 1993 saw Air Botswana incurring financial losses, in 1994 the government wrote off P74 million of the airline's losses and converted them into equity.[12]
After the aircraft circled Gaborone for two hours, Phatswe crashed it at a speed of 200 knots (370 km/h) into the airline's two other ATR 42s, which were parked on the apron, destroying all three aircraft.[15] The incident left the company with only a single BAe 146, which had been non-operational for a year because of technical problems, forcing the airline to lease an aircraft to operate scheduled flights.[15][18] It was revealed that Phatswe had been grounded for medical reasons, was refused reinstatement, and was regrounded until February 2000.[15]
Privatisation attempts
Because the airline had been regularly posting financial losses, which was in part is due to overstaffing, the operation of an ageing, fuel-inefficient fleet, increasing operational costs, inadequate management expertise and an inability to retain and attract qualified pilots, the government earmarked Air Botswana to be the first of the parastatals to be privatised. The costs which the airline incurs, in conjunction with low quality of service, poor marketing, high insurance premiums and a slow uptake on new technology, has restricted growth potential for the airline.[19][20][21] However, in the five years to 2003, the government had not had to subsidise Air Botswana, and in the previous six years had made a profit.[12]
The privatisation process began on 19 April 2000, when the government signed a consultancy agreement with World Bank-affiliated International Finance Corporation, which saw IFC being appointed as the government's main adviser in the privatisation process.[22]
In 2003, the government attempted to privatise the airline, with Air Mauritius and Comair put forward as strategic partners. The process would have seen the winning bidder receiving a 45% stake in Air Botswana, with the government holding a further 45%, and employees holding the remaining 10%.[23] It was planned that once the airline has firmed its position under new ownership, it would be listed on the Botswana Stock Exchange.[24] Air Mauritius withdrew from the process in September 2003, citing the downturn in global air travel markets since the 11 September 2001 terrorist attacks in New York City. Comair withdrew in December 2003, due in part to increased competition by low-cost airlines in the South African market. The government suspended the search for a strategic partner in February 2004.[25][26]
Following a P300 million loss in the first quarter of 2006, the Sunday Standard reported that the government hurriedly began efforts to privatise the airline before it became insolvent. The newspaper also revealed that the airline defaulted on its US$42,000 – 45,000 payments for the lease of the BAe 146 from April — July 2006, and that the arrears were paid once the airline's Secretary and Corporate Counsel warned that non-compliance with the contracts could lead to the termination of the lease of the aircraft and expose the corporation to claims for damages, which would affect its image during the privatisation process.[27] In September 2006 it was announced that three potential investors had placed bids for the tender to take over the airline: Airlink of South Africa, African World Airways Ltd, and Lobtrans (Ltd), a local truck fuel transporter. Shortlisted companies which did not submit bids included Ethiopian Airlines, Comair, Tourism Empowerment Group, ExecuJet, and Interair South Africa.[28] In November 2006, the Public Enterprises Evaluation and Privatisation Agency announced that Airlink has been put forward by the Ministry of Works and Transport as the preferred bidder for Air Botswana.[29]
It was revealed by the press that Nico Czypionka, the man responsible for leading negotiations between the government and Airlink, had convinced the government as early as April 2006 to go into partnership with the South African airline. It was alleged that the deal with Airlink was a foregone conclusion from the beginning of the process, and that other airlines had been invited to submit bids to create and illusion of fair and equitable processes. The Sunday Standard also revealed that the blueprint for the privatisation of the airline was written by Airlink CEO Roger Foster, and was used by Botswana in its negotiations with the airline, in contravention of the Botswana Privatisation Policy of 2003.[30]
As part of the proposed deal with Airlink, it announced that Air Botswana would be wound up, and a new airline to be known as Botswana Airlink would be formed, with the government holding a controlling 50.1% share and the South African airline holding the remaining 49.9%.[31][32][33] The new airline would have disposed of the 46-seat ATR 42s, and would instead operate 29-seat BAe Jetstream 41s, which are more suited to low traffic domestic routes. The deal would also have seen the retrenchment of all 300 employees of Air Botswana, with approximately 180 being rehired by the new airline.[34]
The Government ceased negotiations with Airlink in October 2007, when the Cabinet reached a decision that the deal was no longer viable. A major sticking point, according to Mmegi, was that Airlink was adamant in replacing the national colours of blue, black and white, with those of South Africa.[35] The Cabinet also believed the proposal didn't meet requirements for air transport for the country, and didn't address government objectives for the further development of transport and tourism sectors in Botswana,[36] although the tourism industry regards Air Botswana's monopoly of air transport in Botswana, and the resultant high fares and limited schedules, to be a major constraint for the development of tourism in Botswana.[37]
The government then began the search for a management company to operate the company for a three-year period,[38] and also announced that the government would recapitalise the airline by injecting P100 million to improve performance and to make it more attractive for privatisation.[39] The government entered into negotiations with Comair, but following disagreements over terms, negotiations continued with reserve bidder International Development Ireland, in conjunction with Aer Arann.[40]
According to press reports in August 2008, Alexander Lebedev, a Russian oligarch, expressed interest in investing in the airline, and the Ministry of Works and Transport confirmed that Lebedev was invited to travel to Gaborone to present his bid to the government.[41] Part of the bid reportedly included extending Air Botswana's route network to Düsseldorf Airport; the base of Blue Wings which is 48% owned by Lebedev's National Reserve Corporation.[42] At the end of 2008, it was reported that Lebedev had abandoned plans for investment in Air Botswana.[43]
Recent history
In December 2008, Air Botswana signed a deal with ATR for two 68-seat ATR 72–500regional airliners worth US$37 million. The aircraft were delivered in March 2009, and it was announced that routes linking Kasane and Francistown with Johannesburg would be restarted. The aircraft were delivered at the time of Air Botswana facing increased competition from South African Airways which had re-entered the Johannesburg-Gaborone market.[44][45][46] In July 2009, Air Botswana signed a codeshare agreement with Kenya Airways, which began flights to Gaborone on 6 September with three flights per week.[47][48]
In December 2012, Nyoni-Reiling resigned, and press reports in May 2013 indicated internal conflicts and that two directors had been suspended for gross mismanagement pending investigations.[51]
In late 2015, Tshenolo Mabeo the, Minister responsible for Transport, sacked the then General Manager Ben Dahwa together with his entire board of directors, following allegations of corruption. General Tebogo Carter Masire, former Botswana Defence Force (BDF) Commander, was appointed in February 2016 to lead Air Botswana as board chairman, replacing Nigel Dixon-Warren.[52]
In November 2019, the EastAfrican newspaper reported that Air Botswana was in the process of cutting its staff numbers from 450 to 210 people. The airline has been running at a loss for more than a decade, reportedly due to high maintenance costs for its planes.[53] The plans also include outsourcing ground handling services to a new company, yet to be formed. It is expected that the majority of the retrenched workers will be hired by the new ground handling outfit.[53]
Corporate affairs
Ownership
An Air Botswana ATR 72.An ATR 42 of Air Botswana.Air Botswana BNB 6382, pictured in 1981
Despite various initiatives to privatise the airline, in whole or in part, Air Botswana remains 100% owned by the Government of Botswana.
Business trends
Air Botswana has been consistently loss-making for many years. Although the airline is government owned, full annual reports do not appear to be published. Financial results (for years ending 31 March) are published by the Auditor General, and other data in AFRAA reports, as below:
_taxiing_at_OR_Tambo_International_Airport_(1).jpg)
.jpg)
.jpg)
