Graphic Business News

Ghana to operate national carrier next year ....Govt cautioned against interference

By: Kester Aburam Korankye
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Mr Joseph Kofi Adda  — Minister for Aviation
Mr Joseph Kofi Adda — Minister for Aviation


THE government has concluded plans to establish a home-based airline to provide regional and intercontinental air transport services.
Expected to commence operations in 2019, the airline will ensure efficient movement of people, goods and services, as well as promote local tourism.
The Minister of Finance, Mr Ken Ofori-Atta, who made the announcement in the 2019 Budget Statement and Economic Policy explained that Cabinet had given approval for the establishment of the airline in partnership with the private sector.

“Strategic investors will be engaged, and the airline is expected to commence operations in 2019,” Mr Ofori-Atta said.
Mr Ofori-Atta explained that the government would provide the necessary impetus to support access to aircraft, route rights and airport slots at destination airports to ensure that the newborn airline was founded on solid bases to become sustainable.

Failed attempts
The country’s first attempt at owning a home-based carrier was in 1958 when the defunct Ghana Airways Limited was established. The airline had a cooperation agreement with the South African Airways in 1999 to boost its operations, but was run down by debts and legal disputes.
Later in 2004, the government made yet another attempt at rekindling the country’s dream of operating a successful home-based carrier with the establishment of the defunct Ghana International Airlines (GIA).
The GIA took over from the Ghana Airways Limited as a partnership between the government and a group of private international investors.
The government owned 70 per cent shares in the company while the international consortium owned 30 per cent.
Despite the collaboration between the government and the said international investors, GIA ceased its operations in 2010 after six years of recording losses.

Govt must stay off
To avoid similar failures, a former Chief Executive Officer (CEO) of Ethiopian Airlines, Mr Girma Wake, has cautioned the government not to meddle in the management of the airline as governments in Africa had proven to be bad managers of airlines.
“State airlines in Africa collapse because they are run by politicians with no expertise in airline management so in the end they mismanage it,” he told the GRAPHIC BUSINESS in an interview.
He said the government must, therefore, employ the right experts with experience in managing a successful airline to ensure the sustainability and profitability of the new national carrier. 
“The government of Ghana must know better and hire the right experts because the country can sustain a successful airline,” he said.

Premium
However, the prospects of owning a national airline are enormous. Africa is home to 16 per cent of the world’s population but its aviation industry accounts for less than 30 per cent of the global market although the industry supports approximately seven million jobs and contributes more than US$80 billion in Gross Domestic Product (GDP).
According to the Airbus Global Market Forecast, the aviation industry in Africa was expected to grow significantly. For instance, passenger traffic to, from and within Africa is expected to increase by 5.4 per cent yearly over the next 20 years.
The expected demand for air transport will be driven by urbanisation, trade and tourism as many African countries have began various campaigns to boost local tourism.
“It could rise even faster if the recently announced Single Africa Air Transport Market is fully implemented across the continent. Conservatively speaking, African carriers will need at least 1,100 new passenger and freighter aircraft to meet the rising demand by 2037,” the report said. — GB