Monday, June 26, 2017

How Wilderness Holdings beat CemAir

The original intention was never to sell off Air Botswana, fresh information has revealed. Paper trail seen by this publication points to a Presidential Directive that directed the Ministry of Transport and Communications to turn Air Botswana into a company with private shareholding, and Wilderness Holdings was to be a partner with the Government of Botswana.

Notwithstanding the decision by Wilderness Holdings to withdraw its expression of interest in Air Botswana, the Public Enterprise Evaluation and Privatization Agency (PEEPA) is already working on a process to turn Air Botswana into a company, and a draft constitution is already circulating for comments.

One of the objectives of turning Air Botswana into a private company is to engage the private sector in the ownership and management of Air Botswana to ensure continued provision of air travel services in the domestic, regional and international markets by a viable and efficient airline.

Furthermore the intention by government is to sustain business travel within and to Botswana and also support and grow tourism travel to the country. Importantly it was emphasized to interested bidders that government was looking at reducing its future financial commitment in the airline.

Bidders were to further grow the aviation sector and its contribution to the economy through private sector participation. An objective of the government that turned away some of the potential partners is the one that calls for “retaining of the brand Air Botswana.”  The colors, brand, and name Air Botswana are to be retained.

Wilderness Holdings was mentioned in the Presidential Directive as the preferred partner after it was presumed to have satisfied the stated objectives ahead of CemAir. The bid assessors looked at previous experience in the provision of Airline Services; understanding of airline operational and market realities; access to resources; and the extent to which local participation in ownership or operations is possible.

How Wilderness Holdings got the nod

Wilderness Holdings and CemAir’s business models were compared and the model by Wilderness Holdings was found to be the better model of the two to address what the Government intends doing regarding identifying a partner for Air Botswana. The Ministry is of the view that Wilderness Holdings have aviation experience through Wilderness Air, which provides small aircraft charter services tourists. 

“Wilderness Holdings also have direct contact with tourist’s right from places of origin. They also have the potential to develop tourism air travel to and within Botswana as well as to build onto the existing Air Botswana network and capabilities,” argues Kabelo Ebineng, the accounting officer at the Ministry of Transport and Communications.

Ebineng points to the fact that CemAir’s business model showed that they are well-established, profitable aircraft leasing organization, with a small scheduled operation (seven routes) in South Africa. He says they also have an existing relationship with Air Botswana through the extended lease of a CRJ100 aircraft. “However, they lack international marketing and distribution experience,” says Ebineng.

Sharing on the aviation experience of Wilderness Holdings, Ebineng does not hold back, “Wilderness Holdings Limited began life as Wilderness Safaris in Botswana in 1983. It listed on the Botswana Stock Exchange with secondary listing on the Johannesburg Stock Exchange on 8 April 2010 and is widely recognized as one of the world’s foremost tourism businesses.

Wilderness Holdings Limited is the holding company for the ecotourism brands of Wilderness Safaris and Wilderness Collection – and the non-profit trusts of Children in the Wilderness and Wilderness Wildlife Trust. 

Operating some 45 safari camps and lodges, and 10 scheduled overland safaris in Botswana, Congo (Brazzaville), Kenya, Namibia, Seychelles, South Africa, Zambia, and Zimbabwe.”  

On CemAir, Ebineng writes: “CemAir is a licensed International and Domestic Scheduled and Nonscheduled air carrier with approval from the South African Department of Transport and Civil Aviation Authority to conduct operations throughout Africa and the Middle East as part 121 and 135 Operator. In addition CemAir is a licensed Part 145 maintenance and repair organization with in house capabilities to maintain all of our own aircraft.” 

Some within Government are persuading the powers that be to lobby Wilderness Holdings to reconsider its position of withdrawing from the muted partnership.

No comments: