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  1. 1. INTRODUCTION Sheree Hanna (2009),The airline was established in 1988, employs 400 people and is based at Sir SeretseKhama Airport. On-site technical staff conduct full maintenance not only on the home fleet but also on the aircraft of other African carriers. The Company currently operates four regional and three domestic routes centered on Gaborone and Johannesburg. Annual revenues are currently approximated US$20 million and the book value of the equity is about US$26million. The Company has been through a substantial restructuring in the last five years, and survived a recent traumatic event that destroyed the fleet of three ATR42 aircraft. Re-fleeting is being left as a joint decision with the strategic partner, and current requirements are met with operating leases. Annual air passenger movements in Botswana total about 400,000 including 235,000 for scheduled services, of which Air Botswana carries more than 150,000. Based on a market survey, approximately 47% of Air Botswana passengers are business travelers and 31% are tourists; both niches are targeted for expansion. Botswana has Bilateral Air Service Agreements (BASAs) with more than 10 countries, under which Air Botswana is the sole designated carrier. The GoB is also in the process of establishing an autonomous Civil Aviation Authority (CAA) that will oversee increased competition.SouthAfrican.To(2013),Air Botswana is based at the Sir SeretseKhama Airport in Gabarone (Botswana), and operates regular flights to Johannesburg (South Africa), Harare (Zimbabwe), Victoria Falls (Zimbabwe), Maun (Botswana), Kasane (Botswana), and Francistown (Botswana. It further states,News 29 August 2013. Botswana's ambassador to Japan, Jacob Nkate, comments on his Facebook page : "Air Botswana needs help with equipment. Kasane cancelled yesterday and delayed today stranding many people including a family of 3 from Japan who had booked two nights at Mowana and whose holiday is now ruined." 30 July 2013. Two ATR72-500 turboprops which were bought in 2009 have been found to be unfit for use at Maun Airport, because of the high temperatures there. This follows the engine of one of the planes exploding mid-air in 2012. 30 May 2013. It's reported that two managers at Air Botswana have been suspended, possibly related to the 13 May incident in which an aircraft had to return to Gaborone after an engine blew apart. 13 May 2013. Shortly after takeoff from Sir SeretseKhama airport, the engine of an Air Botswana flight bound for Johannesburg, blows apart. ”We left SSKI at about 9am and 30 minutes after take off we heard a huge booming sound. It sounded like something had blasted and that was when flight attendants informed us that the engine had blown apart and we had to return to Gaborone to land and board a different aircraft. I was destined for Asia and I nearly missed my connecting flight but I thank God I am alive.” said a passenger, “It’s true. There was a slightly higher than normal power surge, so the flight had to turn back as a safety precaution. This is excellent as it is exactly what we have trained our pilots to do.” said SakhileReilling, the Chief Executive of Air Botswana 17 Apr 2013. A rowdy passenger who was insulting staff members is offloaded from an Air Botswana flight at Maun Airport. The passenger was an employee of the Botswana Communications Regulatory Authority (he requested that his name not be published).
  2. 2. 5 Apr 2013. Air Botswana decides to restart CPT - Maun flights; flying twice a week on Sundays & Thursdays. 1 Apr 2013. Air Botswana quits flying from Cape Town to Maun. 31 Mar 2013. Air Botswana planned to fly 3 weekly flights commence from Gaborone to Lanseria, served by ATR72s, but later cancelled this plan. Feb 2013. Air Botswana opens a "Pula Lounge" at Sir SeretseKhama International Airport in Gaborone, naming it after Botswana's currency. The lounge is available to members of the Teemane Club (Air Botswana's frequent flyer club). "Now our passengers will be able to conduct their business here before they fly out," said Robert Mpabanga, the commercial manager at Air Botswana. Desperate Air Botswana seeks to hire GM VICTOR BAATWENG (2011) The national airline, Air Botswana’s mystery of operating without a permanent General Manager continued this week when it lost its acting general manager, MphiTlhomelang. Tlhomelang, who was formerly the Finance Manager at AB, was appointed to act in the position after a board meeting of 27th June 2013 and is reported to have died on Monday this week, after a short illness. Following the departure of SakhileReiling earlier this year, and the subsequent passing on of Tlhomelang this week, the Air Botswana board of directors are said to be desperately searching for an individual who will turn around the embattled airline into an efficient, dependable and highly competitive regional airline. The airline has already advertised the vacancy for the post in the local media and the deadline has been set for mid September this year. UNSTABLE Air Botswana, a carrier of the national brand, has never been stable since the departure of Joshua Galeforolwe as all the past substantive General Managers appointed jumped ship before the end of their contracts. Upon the departure of Galeforolwe, the then Finance Manager, Cornwell Muleya was appointed on an acting basis. This was shortly before the appointment of Willie Mokgatle who later resigned and joined Shell Oil International. Other subsequent appointees include Beatrice Selotlegeng, who was also appointed on an acting basis before she paved way for Lance Brogden. It was after Brogden left Air Botswana that the then Finance Manager MphiTlhomelang and MaemoBantsi (Head of Human Resources) were appointed (on acting capacities). The Air Botswana Board was later to appoint a British national Mike Higgins. Higgins to everyone’s surprise, tendered his resignation within three months of his appointment and was replaced with the past immediate General Manager, SakhileReiling. Reiling, an expert in the aviation industry with many relevant technical qualifications, took over the hot seat in May 2011. She first joined Air Botswana, as its first female pilot in 1988. “I am also happy that once again, I made history in the aviation industry of Botswana. There are challenges here and there but I believe challenges are part of the solutions,” said Reiling when she was appointed the Air Botswana boss-lady in 2011. But just under two years at helm, Reiling, who was also the first female head of the airline in 2011, dropped a bombshell; she announced that she would be leaving the ailing national airline by March this year. Her move was seen as a major blow to Air Botswana since upon her arrival at Air Botswana, she had been
  3. 3. driving a major strategic plan of recovery for the struggling national airline. It was under the leadership of Reiling that Air Botswana was readmitted into the International Air Transport Association (IATA) as a full member after finally passing the exacting IATA Operational Safety Audit (IOSA) audit. Air Botswana had been failing the audit since 2007. The Zimbabwean born pilot also helped Air Botswana’s financial recovery, reducing its net losses which had been accumulated over many years. With Air Botswana enjoying its fair share of bad publicity, Reiling was then head-hunted by IATA to take up a very senior position in Johannesburg, South Africa She left the airline in March this year. But was the departure of Reiling the end of the road for AB? ThapeloMoribame, Marketing Manager at AB said a firm, confident, “No!”in a previous interview with BusinessPost. “Not at all; while the Airline has been fortunate to have been led by a person of Reiling’s qualifications and experience, since announcing her resignation, the most important thing for the Board and Management of Air Botswana has been to ensure a smooth transition and that entails ensuring that there is continuity and that operations are not interrupted in anyway, that the best service and hospitality is maintained for the benefit of our valued customers”. But how soon can the national airline, which is reported to be eyeing the relocation of De Beers’s Diamond Trading Centre to Botswana, get a general manager? Moribame said: “All things being well, the process is expected to be finalised as soon as possible as we are confident that the airline will appoint a successor. As you may be aware, the aviation industry is highly specialised and that the recruitment process might take longer than expected”. Late last year, the airline also lost one of its top executives, Paul Champane to the newly created Government diamond selling entity, Okavango Diamond Company (ODC). Champane was the Head of Information Technology (IT), responsible for implementing the ailing national airline’s e-commerce strategy and other online advancements. FINANCIALLY CRIPPLED Figures as shown in the Auditor General’s report of parastatals for the financial year that ended March, 2012 show that AB registered a loss of P47.12 million compared to a loss of P54.20 million reported in the previous year. The improved performance was attributable to an increase in revenue from P246.24 million in the previous year to P278.61 million in the current year, representing a 13 percent increase, while expenditure increased from P301.43 million to P325.73 million in the current year. Air Botswana’s working capital position as at March last year showed current assets of P79.08 million and current liabilities of P103.25, giving a net current liabilities position of P24.17 million. The Auditor General says this position represents an unfavorable situation for Air Botswana, a sentiment shared by auditors at Deloitte. INTENSE AND GROWING COMPETITION AB, which has been plagued by poor service over the past few years, seems to be getting stiff competition from other airliners that operate and seek to operate in the country. Projections show that from last year going forward, the country’s aviation sector will be boosted by the possible completion of the multi-billion Pula Airports Infrastructure projects which entails the expansion and refurbishment of Maun International Airport and Sir SeretseKhama International Airport. The Francistown airport which was also being refurbished has since been completed and handed back to government by the constructor. In addition to completion of airports, airlines which operate in Botswana have since announced more
  4. 4. domestic and international flights for this year, with one of the major AB competitors, SA Airlink having launched a daily route between Johannesburg and Maun last year. Another local airliner, Bluesky Airways is awaiting the government to open up the skies before it commences its scheduled operations. As a local airliner, Blue Sky is expected to have local routes to destinations such as Maun, Kasane and Francistown. Available figures provided by Statistics Botswana (SB) show that the volume of local and international passengers in the country’s skies reached 788,461 last year. This is a nine percent increase from 2010 as the country’s aviation sector inches towards a million annual air passengers in its history. Air Botswana loses over P54 million - audit report 26 April, 2012 GABORONE - Air Botswana has recorded a loss of P54.20 million in the financial year 2010/11, the Auditor General report stated. The national airline loss follows another of P45.07 million reported in the previous year and the increase is attributed to increase in expenditure from P264.76 million to P301.43 million. The report stated that the expenditure figure for the year included variable costs amounting to P143.69million, representing 26 per cent of all costs and the revenue for the year was P246.24 million compared to P219.68 million in the previous year. In other matters, the auditors observed that there were instances where long outstanding deposits dating back to 2008 were still showing as reconciling items in the bank reconciliation as at 31 March 2011. Outstanding bank deposits that take a long time to clear in the bank statement could be indicative of inattention to important accounting matters, reads the report. This was an indication of deficiency in the internal control measures which could lead to the corporation incurring unnecessary losses. The management stated that month-end procedures require that they make follow up of all deposit suspense items on a regular basis, so as to resolve outstanding issues on the reconciliation statements. Further, there had been correspondences with the respective banks regarding the various outstanding deposits that had not been accredited to their deposit accounts. While I cannot dispute the management assurance on this matter, I am unable to appreciate why it would take over three years to resolve reconciliation items. The auditor general further noted that although management had made provisions for long outstanding balances, there were insignificant trade and other receivable balances amounting to
  5. 5. P13.85 million which were more than 120 days at the time of audit. Where trade and other receivables are long overdue, funds are unnecessarily tied up in receivables and there was an increased risk of un-recovered balances. In response, the management stated that they were in the process of following up long overdue accounts with hope that some debts will be recovered, the auditors recommended that management should consider to write-off some of the debts Further, the auditors reported that there was an unresolved dispute between Air Botswana and Civil Aviation Authority of Botswana regarding passenger service charges involving an amount of P3.19million and this figure has recurred as a reconciling item going as far back as 2002. Furthermore the auditors had observed that the contracts of the Director of Flight Operations and the Director of Customer Grounds Services had not been signed contrary to the requirements of the Employment Act which stated that every employee must have a legally binding agreement. The auditors also observed that some fixed assets especially furniture and equipment were not assigned unique asset numbers for identification and differentiation purposes.These numbers would enable easy identification of the assets from the fixed assets register to the physical location. BOPA