P18 million annual losses for Air Botswana Maun /Cape Town route

Air Botswana has been making losses ranging between P17 million and P18 million annually on its Maun/Cape Town route since its inception in 2012, Parliament heard last week.
Former Minister of Transport and Communications, Nonofo Molefhi told the house that; “The revenue for the route since its inception ranged between P7, 448, 000 and P12, 791, 000 per annum while the operating costs ranged between P25, 360, 000 and P30, 859, 000 per annum leading to a loss of between P17, 912, 000 and P18, 068, 000.”

Molefhi, now Minister of Infrastructure, Science and Technology said the route was costly and Air Botswana at one point decided to terminate it. This was after the evaluation of its performance at the end of the 2012/13 financial year. “By the end of the 2012/13 financial year, Air Botswana evaluated performance of this route and decided to terminate it due to high operating costs, i.e. sourcing of spare parts, sudden equipment breakdowns and high maintenance cost,” he said.

Molefhi said in recognition to the strategic importance of the route to Botswana tourism, government requested Air Botswana to continue operating it, saying government then provided a P30 million subvention for the operation of the route as well as other routes.

In 2012/13, the passenger carrier carried an average of 381 passengers per month and the number decreased to 328 the following year before rising to 418 over the 2014/15 period.
Furthermore, still in its efforts to help Air Botswana reduce operational costs, Molefhi highlighted that last year Government engaged ICF Management Consultants to assist in developing a turnaround strategy for Air Botswana. He said the consultants recommended that the Maun/Cape Town direct route should be operated twice a week via Gaborone. “This will result in combining passengers on this route with the current Gaborone/Cape Town passengers. It is envisaged that this will increase passenger convenience through increased frequencies, as well as increasing load factors whilst reducing operational costs to curb the losses,” he explained.

was answering a question from Member of Parliament for Mogoditshane, Sedirwa Kgoroba on behalf of the Minister of Transport, Tshenolo Mabeo. Kgoroba had asked the Minister to give a profit and loss analysis of the profitability or non-profitability of the route.