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Air Botswana’s continued turbulence

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Air Botswana’s continued turbulence

*To retrench over 200 staff *Targets to be profitable by 2021

Air Botswana’s top dogs have admitted the national airliner’s turbulence is far from over.

‘Smoother skies are on the horizon but it will take some time to reach them!’ was the underlying message as management updated the media on the airline’s progress this week.

Recently, Air Botswana has come under increasing fire for late cancellations and long flight delays.

This came as a crushing blow to the airline, who last year replaced its aging fleet with three new planes.

The state-owned company followed the purchase by cutting its staff contingent by almost a third.

However, the new era Air Botswana were banking on is yet to materialise.

Highlighting the hiccups, the airline’s Board of Directors’ Chairperson, Tebogo Masire said, “We had thought buying new aircraft and getting rid of the 150 or 200 people would do the trick. But unfortunately in the short term that has been affected by two or three things.”

The first obstacle Masire mentioned was not getting the value they expected for trading their aircraft.

“Therefore that will obviously affect our books. It is also imperative that we visit the manpower issue,” he continued, revealing the airline currently has three aircrafts against 400 employees.

According to Masire, ideally they should be employing around half that number.

The company plan to bring down the numbers through retrenchments as well as unbundling of services, such as ground handling to make it a stand-alone business.

Masire explained that Air Botswana’s troubles were compounded by the introduction of the jet and the two ATRs which caused further instability to the airline.

“When we introduced the jet and the two ATRs at the same time, it caused a lot of instability in the sense that it was like biting more than we could chew. Additionally at the beginning of this year we had a lot operational issues where flights were always late,” revealed the former Botswana Defence Force (BDF) commander who also sits on other boards such as that of the Botswana Stock Exchange Limited.

Whilst Masire maintained they had turned a corner and the airline schedule was more or less back to normal, he conceded things were still far from perfect.

“We still have teething problems because the jet itself has proven to be prone to technical issues. As we speak it is grounded!”

Meanwhile, Air Botswana General Manager, Agnes Khunwana announced the airline is ready to re-introduce Harare and Lusaka routes, which she said they are confident will now be profitable.

“We are also planning to link this with our Cape Town flight, so as to boost volumes with traffic from or to Cape Town,” added Khunwana.

Air Botswana, which has been struggling to make profits for years, is expected to be profitable by 2021, according to Khunwana – although she did not state how this will be achieved!

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Delivering good news

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Delivering good news

Botswana Post registers profit despite amalgamation costs

Botswana Post CEO, Cornelius Ramatlhakwane says the amalgamation of Botswana Post and Botswana Couriers and Logistics went according to plan.

Although he described the task as demanding due to government’s insistence that no jobs be lost during the process, Ramatlhakwane revealed it has been achieved despite the costs incurred.

Addressing the media recently, the CEO said the amalgamation of the two institutions presented an opportunity to maximize talent management by putting the correct people with the required skills in the right place.

The process, according to Ramatlhakwane, was a costly one as Botswana Couriers and Logistics was insolvent, with approximately P12.4 million operating losses and P30 million in unrecoverable debts.

Despite the costs incurred from the amalgamation, Botswana Post managed to register profit before tax of P6.2 million, a 51.5 percent increase from the previous year while revenue grew by 16.5 percent.

Revenue growth is reported to have been driven mainly by the courier and logistics business, which contributed 83 percent of the total revenue.

Besides incurring costs due to the amalgamation, Botswana Post experienced a 23.6 percent increase in costs of sales.

This was because of the 50 percent increase in employee costs as a result of the rise in staff complement emanating from the amalgamation process.

Meanwhile, providing an overview for the 2018/2019 financial period in the company’s annual report, Chief Financial Officer, Ofentse Mabote noted growth before inclusion of courier and logistics business was just 2.3 percent.

He said the sluggish growth was largely driven by non-traditional revenue lines which grew by 10 percent whereas traditional lines registered 7 percent growth with both lines said to be facing stiff competition.

The company is banking on PosoMoney and low cost money transfer products to protect its market positioning.

Meanwhile, Mabote says the Universal Postal Union (UPU) Postal Economic Outlook for 2019 anticipates all key factors that underpin the activities of the postal sector worldwide will continue to expand.

Therefore, he says in this environment, postal operators are trying to adapt their business models, shifting their focus to parcels, logistical and financial services.

He noted the amalgamation of Botswana Post and Botswana Couriers and Logistics comes at an ideal time as it positions Botswana Post to capitalize on this trend.

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ODLM holds long service awards

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ODLM holds long service awards

They spend most of their days digging up and polishing the shiny stones that are crucial to Botswana’s economy.

Last Friday (22 October), however, they were the shiny stars.

In a glitzy ceremony held at Orapa’s Adrian Gale Diamond Museum, Orapa, Damtshaa and Letlhakane Mines (ODLM) paid homage to its long serving employees.

In total 169 workers were honoured, seven of whom were celebrating 40 years with Debswana.

Praising the award winners for their ‘commitment, endurance and loyalty’, ODLM General Manager, Bakani Motlhabani noted their contribution has helped transform the company into what it is today.

“I must say we are honored and thankful as Debswana management to have employees of your caliber – employees with passion, dedication and perseverance. To see so many of you marking milestones like this makes us proud,” gushed the GM.

Motlhabani further voiced his hope that the employees will continue working for ODLM and Debswana to lead the mining giant’s quest to ‘make life brilliant’.

The event’s Guest of Honour, Permanent Secretary in the Ministry of Mineral Resources, Green Technology and Energy Security, Mmetla Masire described the occasion as a momentous milestone.

He labelled the long servers as people with ‘the skills, experience and knowledge that oil the institution’s seamless operation’.

Turning his attention to the impact Debswana has had on the country since setting up shop in June 1969, Masire said, “Debswana’s diamond mining activity has brought about remarkable growth, transforming Botswana from being one of the poorest countries in Africa to being one of its modern economic success stories.

“This transformation is due to the remarkable efforts of men and women who have worked for this company and those that we are celebrating tonight. Thus, it is befitting that you celebrate with pride, knowing the positive contribution you have made to the socio-economic development of this country.”

ODLM holds long service awards
GRATEFUL: OLDM GM Motlhabani

He closed by thanking Debswana management for investing in and recognising its human capital through initiatives such as the long service awards.

“The role of long service awards cannot be overemphasized. They play an important part in motivating and engaging staff, retention of staff as well as strengthening a strong culture within an organisation that ultimately drives business excellence,” stressed Masire.

Reflecting on his 40 years with Debswana, Planning Coordinator, Jonathan Sesinye revealed he joined the organisation ‘when the road was bumpy’.

“It was very different from today. We were fetching water from a dam at Mopipi and it was very salty. And there was no power. I see many changes – even the pit was very small! Experiencing the transformation is extremely important,” stated Sesinye.

For her part, ODLM Psychologist, Martha Ntapu Mathumo, who has clocked three decades with the company, said she was able to raise her kids and grandchildren thanks to her employment with Debswana.

“I acquired many certificates under this company, it took me outside the country to learn a lot. I really thank Debswana,” said Mathumo.

LANDMARKS CELEBRATED ON THE NIGHT

20 YEARS SERVICE – 90 EMPLOYEES
25 YEARS SERVICE – 11 EMPLOYEES
30 YEARS SERVICE – 46 EMPLOYEES
35 YEARS SERVICE – 15 EMPLOYEES
40 YEARS SERVICE – 7 EMPLOYEES

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Data sharing critical for banks and lenders

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Data sharing critical for banks and lenders

TransUnion Director Africa Business Development, Adrian Pillay says improving compliance and data sharing can help banks and lenders in Botswana lower their lending risks and reduce non-performing loans.

Pillay was speaking at a workshop last week to discuss the need for better data quality and risk based solutions across the financial services sector.

The initiative was aimed at helping local banks and lenders protect their profitability while promoting responsible lending.

Pillay stressed that as a risk and information solution provider, TransUnion Africa is keen to engage with the banks to discuss the challenges and status of data sharing in the market and how it can bring added value to the banking community.

He explained that data sharing helps uncover whether customers are good or bad payers of their loans.

“Credit bureaus on a monthly basis collect information on behalf of banks so effectively that if someone has a personal loan with a certain bank or home loan with another any lender can view the type of borrower you are. A bank can get a credit report from credit bureau which show the customers’ outstanding balance and a lender can decide whether to approve a loan or not. There are three credit bureaus at the moment operating in Botswana with micro lenders, banking retail customers’ data information,” highlighted Pillay.

For his part, TransUnion Botswana Country Manager, Kabelo Ramaselwana said it is critical for banks and lenders to understand their customers when it come to making the right decisions and ensuring their profitability.

He revealed average annual cash earnings in Botswana have increased by 5.1 percent over the decade to 2017 compared to an inflation average of six percent. He noted this makes it important to lenders to make the right lending decisions.

“As at December 2018, there were 277,762 household borrowers in Botswana with a total of P33.1 billion of loans extended by commercial banks. Unsecured personal loans now make up 67 percent of all household borrowings with 27 percent being mortgages and six percent motor vehicle loans. This reflects a significant shift in the composition of household debt over the past two decades. In 2000 unsecured personal loan made up only 45 percent of household borrowings,” said Ramaselwana.

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