MAJOR AIRLINES VICTIMS OF KHAMA DECREE ON AIR BOTSWANA

MAJOR AIRLINES VICTIMS OF KHAMA DECREE ON AIR BOTSWANA

The Business Weekly & Review has been availed Presidential Directive CAB 12 (A) 2017, dated 03 May 2017, in which cabinet was instructed to convert Air Botswana into a company with private shareholding, and to partner with Wilderness Holdings, who will have majority shareholding, while the state retains a smaller stak. The Presidential directive overlooks the colossal Ethiopian Airways, South Africa’s ComAir and Germany’s InAvia Aviation Consultants GmbH, Staff Writer KITSO DICKSON reports.

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GABORONE, BOTSWANA, JANUARY 11, 2010, A high level delegation from the G4S group lead by the group chief executive officer Nick Buckles arrive in Botswana for a one day visit on January 11, 2011. During the visit delegation meet the G4S Botswana management and the media after a tour at the Mokolodi Nature reserve on the same day. G4S Botswana acting CEO wecomes the deligation at the Sir Seretse Khama international airport. (Pic:Press Photo)

In a process that has been overshadowed by secrecy and sidelining the Public Enterprises Evaluation and Privatisation Agency (PEEPA), the sole state privatizing agency, from the proceedings, the Directive makes gives the eco-tourism a majority stake in Air Botswana for free.

This week, Kabelo Ebineng, Permanent Secretary (PS) in the Ministry of Transport and Communications, under pressure from Parliament’s Public Accounts Committee finally succumbed and admitted to the impending transaction. In its questions the PAC referenced breaking reports by The Business Weekly & Review, that culminated with Ebineng’s capitulation and confirmation that “the decision has been taken”, Wilderness Holdings is being given the national airline on a silver platter.

Appearing before the PAC Ebineng, obliquely avoided the basis for government’s volte-face, never mentioning the Presidential Directive. Ebineng, said there are ongoing negotiations and updates will be shared with the public in 9-12 months, “Value composition will determine the end outcome.”

He however admitted that the decision should be guided by PEEPA. PEEPA however like other stakeholders is in the dark.
On the 9th of May 2017, Ebineng in writing, defended government and cabinet against media assertions saying actions undertaken by Cabinet, thus far, have followed the normal and long established process(es) of making Government decisions. The defence by Ebineng contrasts with the PEEPA position that, as the institution that ought to have been implementing the privatisation process, both it and the relevant Ministry knew nothing about the Air Botswana ‘give away’ until a Presidential Directive was revealed by the media.

The government statement, peddled through its spin team, were communicated a week after his ministry received an instruction to hand over Air Botswana to Wilderness Holdings.

“Cabinet has per PRESIDENTIAL DIRECTIVE CAB 12(A)/2017 dated 03 May 2017, instructed that Air Botswana be turned into a company with private shareholding, and to partner with Wilderness Holdings who will have a majority shareholding, subject to negotiations and applicable stature requirement.”

Wilderness is a premium tourism outfit where the Khama family has entrenched its influence. President Khama’s lawyer, Parks Tafa, chairs the Wilderness Holdings board; his nephew, Marcus Patrick Khama Terhaar, is an independent non-executive board member. It has previously been favoured by government in a cross-border relocation of about 20 rhinos that will have benefited the privately owned company.

President Khama has 200 000 shares in Linyanti Investments, which owns the money spinning 1 300km2 Linyanti Concession. There is a 15-year lease signed in January 2010 between Tawana Land Board and Linyanti Explorations.

Khama’s decision to award Air Botswana to Wilderness strategically opens Mosu a key eco-tourist area, where government is building a private airstrip to become a prime air hub.

While Ebineng told the committee that the value of composition will determine the end results for the partnership, it emerges that the Khama-affiliated Wilderness Holdings will get 75 percent of the National Airliner while government retains 25 percent.

The decision to award the state airline to the tourism outfit has caught other interest parties who had submitted an Expression of Interest in the now abandoned formal privatisation process, flat-footed as they are still waiting for formal response from government. After national airliners’ expression of interest was floated, 17 companies showed interest in the form of applications. Minister Kitso Mokaila declined to disclose names of those who had filed an Expression of Interest, when he was asked.
Ebinang was at pains to explain the criteria employed by the ministry reach decision to sell Air Botswana. He told the committee that it had come down to two companies: Wilderness and Comair which could turn around Air Botswana.

When The Business Weekly & Review sought answers from Wilderness as to their capacity and funds to operate the national carrier, the company said they will discuss it with the board first. The tourism outfit operates Wilderness Air (previously known as Sefofane Air Charters) which has been in operation for over 20 years. Wilderness Air currently flies over 2.7 million hectares of wilderness conservation land, moving over 75,000 passengers per annum to remote bush destinations. Wilderness Air is operational in three countries, Botswana, Namibia and Zimbabwe, with a fleet exceeding 50 aircraft among the regions, according to the company’s official information.

Wilderness Air began operating in 1991, with one aircraft based in Botswana servicing two camps in the Okavango Delta. The company operates a varied fleet of light aircraft, chosen for their ability to transport visitors comfortably to remote wilderness destinations with dirt airstrips.

The battle of the skies and the privatisation of Air Botswana, spurned the overtures by Ethiopian Airlines. The airliner has become one of the continent’s leading carriers, unrivalled in Africa for efficiency and operational success, turning profits for most years of its existence, its profile says. Ethiopian Airlines was established on December 21, 1945. As one of the pioneer African airlines, Ethiopian began operations, with DC-3/C-47 aircraft. The airliner says in its website that it has now become one of Ethiopia’s major industries and an institution in Africa, operating a modern and environmental friendly fleet. It commands the lion’s share of the pan African network, including the only daily east-west flight across the continent. Ethiopian’s network spans to Europe, North America, South America, Africa, Middle East and Asia, connecting cities across the globe. The airline is currently implementing its 15-year strategic plan called “Vision 2025” with the goal of becoming the leading aviation group in Africa. Elias Ketema, the Area Manager Gaborone has confirmed the airlines interest in Air Botswana but say they says he could not comment on further. “We are 100 percent well capacitated to take Air Botswana if given the opportunity.”

Comair which had publicly expressed interest has been operating successfully within southern Africa for more than six decades with an internationally recognized safety record. Since 1996 the airliner says it has been operating local and regional services within southern African under the British Airways livery. The company’s fleet of aircraft is regulated by the South African Civil Aviation Authority. “As we lease 8 of our aircraft from foreign owned leasing companies, it is also regulated by the Federal Aviation Authority of the United States and the European Aviation Safety Authority.” Read its profile. Comair operate 26 Boeing aircraft, of which it owns 19, according to the company. 7 aircraft are leased from foreign-owned leasing companies.

German independent aviation consultancy InAvia Aviation Consultants GmbH has confirmed that they submitted an Expression of Interest for Air Botswana. Reports indicate that together with its network of partners in the aviation business, InAvia intended to restructure and grow Air Botswana for the benefit of the Republic of Botswana
Germany’s InAvia Aviation Consultants GmbH provides consulting services which include Strategic Planning, Revenue Management, Marketing, Controlling, Cost Accounting, Organisation, Information Systems Consultancy, Project Management, and Contract Negotiations for Customers, Training/Seminars.

International media has detailed how InAvia’s strategy for Air Botswana envisaged growing Air Botswana’s regional network with the introduction of modern regional jets. The airliner would also identify with international airlines to operate flights under codeshares with Air Botswana into Gaborone’s Sir Seretse Khama International Airport.
InAvia’s strategy is reported to involve conducting a full analysis of the company, then to implement a fresh vision into the existing restructuring plan. InAvia will then assess suited partners and bring them into the project. This is said to include further financial partners to broaden the financial basis of the company for future growth.

Michael Hoevel, Managing Partner of InAvia was quoted in the media saying “we believe Botswana has an as yet unrealised potential for travellers into the country, both on business and leisure. Continuing to limiting Air Botswana to a regional carrier, possibly even under a different brand, will not be to the benefit of the Republic of Botswana, and may reduce the national airline to a provider of aircraft and crew to other carriers.”
InAvia also provides Time Management and Turnaround Management to airlines with a team of consultants, all with decades of experience in the airline world.