- Gov’t provided P101 million grant for operations, restructuring
- Auditor General expects losses to continue in the near future
The latest report from the Auditor General shows that the national airline, Air Botswana has losses of over P500 million as at 31st March 2017 and are expected to increase in the near future.
The report reveals the corporation’s losses of P583.81 million as at 31st March 2017, including those from the past years. It further adds that government allocated the airline a grant of P101million in the ended financial year, which was spent on operations, restructuring cost as well as the purchasing of the Enterprise Resource Planning system.
“The corporation had been incurring losses over the past years which had accumulated to P583.81 million as at 31st March 2017. The corporation’s ability to continue as a going-concern is dependent on the government’s continued financial support as the losses are expected to persist into the foreseeable future. In the year under review, government provided P91 million grant towards operations and restructuring. Furthermore, government approved the previously received P10 million earmarked for Enterprise Resource Planning system to be utilized in the operations,” says the report.
However, there appears to be some glimpse of hope as the airline made a loss of only P12.35 million in this just ended financial year.
“For Financial Results in the year under review, the corporation made a loss of P12.35 million, which is a significant improvement from prior year loss of P86.09 million. Operating costs declined by P40.90 million (representing 9%) from P470.62 million in the prior year to P429.72 million in the year under review, while income increased by P32.84 (representing 9%) during the same period,” says the report.
The decline in losses are believed to be as a result of decrease in cost of fuel due to the sale of the grounded 2 Bae 146 and 2 AVRO RJ-85 aircrafts at the beginning of the financial year and the stable fuel prices.
“Significant reductions in expenditure were mainly due to: The 11% (P5.98 million) decrease in cost of fuel due to the sale of grounded 2 Bae 146 and 2 AVRO RJ-85 aircrafts at the beginning of the financial year and the stable fuel prices. Impairment charge went down by P26.26 million as nothing was provided for the current fleet of ATR 42 and 72. Engine overhaul expenses declined by 41% (P8.09) The 37% (P15.30 million) decrease in aircraft wet lease due to termination of some routes where a leased aircraft was used. Exchange loss went down by 51% (P5.80 million). The traffic revenue recorded a marginal increase of 1% from P314.31 million in the previous year to 318.06 million in the year under review,” states the Auditor General.