Magazine article African Business

Air Botswana Climbs into Profit

Magazine article African Business

Air Botswana Climbs into Profit

Article excerpt

After years of losses, Air Botswana is operating at a profit for the first time. The national airline reports a net profit of P3.02m for the financial year ended March 1997. Operating revenue in that period increased 22% to P51.03m while operating costs went up 10% to P47.36m due to fuel price increases and the depreciation of the Pula against the US Dollar.

"The profit is a modest one at this stage, but it shows that we have turned the corner, "says the general manager, Mr Joshua Galeforolwe. "This is a real achievement and a cause for great satisfaction. It clearly paves the way forward for Air Botswana."

The turnaround is a dramatic one when viewed against the heavy losses of P18.655m sustained by the airline for 1993, and P13.734m for 1994. The loss dropped sharply to P2.132m for 1995, and to P1.875m for 1996.

Mr Galeforolwe says the recovery is the combined result of the restructuring and recapitalisation of the airline, fleet consolidation and rationalisation, the lease of the remaining BAe 146 jet aircraft and its replacement with an ATR 42, the rationalisation of the routes, and concerted measures to reduce costs and enhance revenue.

The four-year recovery period saw the judicious transformation of Air Botswana from a jet operator with a marked regional outlook (at one stage it included every SADC capital on the route network and with scheduled services extended as far as Nairobi and Kampala) into a national carrier that is essentially a feeder operator with a niche market in the region. …

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