Comair to bid for Air Botswana - CEO

SHARE   |   Thursday, 16 February 2017   |   By Reuters
Comair to bid for Air Botswana - CEO

 South Africa'sComair will submit a proposal to Botswana take over the nation's carrier, Comair's chief executive said on Wednesday.
    Comair, which operates British Airways in southern Africa
alongside its no-frills brand, has vied for Air
Botswana before, but in 2008 pulled out of a bidding round that
failed to attract successful suitors.
    Botswana on Monday again put its national carrier up for
tender as part of a strategy to privatise loss-making state
    "We'll make a submission and see if they are interested in
our approach," Comair chief executive Erik Venter told Reuters,
adding that proposals had to be made before end-February.
    Botswana's transport department has said it is open to
proposals on various forms of privatisation including joint
ventures, ownership, franchising and concessions.
    Comair wants equity in and control of the airline that
connects four Botswanan cities to South Africa, Venter said.
    "We'd even look at a management contract, but it would have
to be on the basis that we run a large amount of it from Comair
to get economies of scale," he said.
    Botswana Air, which provides cargo and air passenger
services to Cape Town and Johannesburg from Gaborone,
Francistown and the tourism hubs of Maun and Kasane, has been a
drain on state finances.
    Financial losses, blamed on a large workforce and an aging
fleet, have prompted a five-year turnaround plan that includes
cutting costs and cancelling unprofitable routes.
    "It needs economies of scale and a small airline on its own
is never going to achieve that," Venter said, adding that a
takeover would mean moving some of the airline's services to
    Botswana Air, which recently discontinued flights to Harare
and Lusaka from Gaborone, halved its operating losses to 83
million Pula ($8 million) in the 2016 fiscal year.
    Venter thinks the airline is unlikely to attract cash offers
from suitors.
    "I don't think there is any money involved in this one, to
be honest. We wouldn't pay for it, that's for sure," he said.
    Comair is also looking for other acquisitions, Venter said,
without providing further details.
    Chief Financial Officer Kirsten King told Reuters in a
separate interview that Comair has as much as 1 billion rand
($77 million) available for acquisitions and other projects.
    Comair shares rose more than 17 percent to a 23-month high
of 5.95 rand on Tuesday after the firm announced a South African
court awarded it more than 1 billion rand in an antitrust
dispute with South African Airways.