Graphic Business News

Survival of new national carrier • Learning from past lessons key

By: Charles Benoni Okine
Ghana Airways. This is what mismanagement and lack of vision for a nation can do a national property

For many decades, then Ghana Airways was christened “Your Star in the Sky”. It was one of the most cherished and loved airlines on the continent. Ghanaians, out of pride, will prefer to fly the national carrier to any other, not just because it allowed room for more luggage than its competitors, but as a show of national identity and pride.

Talk about the performance of the pilots and many will attest to their smooth landing experience which always gave them room for comfort. Ghana Airways, which was then flying the extinct DC 10 aircrafts, was the only airline in Africa back then to have Certificate A which allowed it to fly direct to any destination in the United States of America (USA).

Unfortunately, after many years of mismanagement, abuse of travel privileges on the part of politicians, disregard for laid- down rules on the part of some staff of the airline, among many other challenges, the once toast in the air was brought to its knees.

It became heavily indebted, owing over US$200 million to creditors from all over the world. The only option to save the situation was for the government at the time to declare the airline bankrupt and begin a liquidation process.

This move got debtors of the airline off the government’s back.

Today, one of the DC 10 aircrafts that used to be the star in the sky, has been reduced to a restaurant, stationed opposite the newly constructed Terminal 3 of the Kotoka International Airport.

New national carrier
After a long wait, Ghana has finally signed a memorandum of understanding (MoU) with Ethiopian Airlines to fly the national flag in the aviation space next year.

The agreement, which will be finalised before the end of this year, will see Africa’s most successful airline, Ethiopian Airlines, contributing to funding, equity, aircrafts and management services which are critical areas the airline has expertise.

Per the tentative shareholders agreement, the government will receive 10 per cent of shares in the home-based carrier Ethiopian, 49 percent while the remaining shares will be for Ghanaian investors.

The Minister of Aviation, Mr Joseph Kofi Adah, who announced this at the celebration of International Civil Aviation Organisation (ICAO) day in Accra last Thursday, will not give full details of the shareholding structure but indicated that, “Ethiopia is coming as minority shareholder with something way below 50 per cent.”

Good news
The good news about this whole transaction is that, at long last, the Ghana flag will fly in the skies again after more than a decade.

The move will afford the government the opportunity to make the country even more popular in the eyes of the external investor community and position it once more as one of the major economic giants in the sub-region.

In terms of tourism, the role played by the erstwhile Ghana Airways is likely to be revived.

There were many special organised trips to Ghana championed by Ghana Airways and that made it easier. Other airlines do it for their countries and, therefore, the new airline, name yet to be determined, can do same or even better to increase visitor arrivals to Ghana.

Why Ethiopian
In Africa today, statistics show that about 47 out of 54 countries own airlines or have a majority shareholding or minority shares in designated national airlines or flag carriers. The successes of Kenya, Ethiopia and Egypt through their respective airlines are there to see. Rwanda, which came from war a decade ago, has a high flying Air Rwanda.

The choice of Ethiopian is not out of place. The airline, although state-owned, has been disciplined in terms of management and there is no government interference in its affairs.

The airline has the right funding at the right time to enable it to increase its fleet by procuring, not refurbished aircrafts, but brand new ones from Boeing.

It is a shame that Ghana will have to fall on another African country to teach it how to run an airline. However, it is important because of the similarities in culture.

South Africa Airways, which is also state-owned, is performing badly with a debt overhang of more than US$2 billion and the bad managerial lessons should also serve Ghana right.

Way forward
The tourism numbers, according to the World Tourism Organisation, indicate that the most visited countries in 2015 by international tourist arrivals in order are: France, United States, Spain, China, Italy, Turkey, Germany, UK, Russia and Thailand. International tourism receipts grew to US$1.26 trillion in 2015, corresponding to an increase in real terms of 3.6 per cent from 2014.

The World Tourism Organisation reports the following African countries, South Africa, Morocco, Tanzania, Mauritius, Tunisia, Uganda, Sudan, Botswana, Zimbabwe and Ghana as the top ten tourism earners for the year 2015.

It is evident that the billions of dollars raked in by tourism are also shared by the national carriers of the respective countries, although that is not the case of Ghana.

But as indicated, this is doable if the right lessons are learnt from the past.

The government must be ready to invest cash into the new arrangement and not depend only on its partner.
The government should desist from appointing party members with no in-depth knowledge about aviation to head the airline. Members of the board should be well-educated and mature personalities with the right vision to make the airline what it should be.

All government officials, including the President and his entourage, must fly the national airline as a demonstration of the trust and confidence in it once it begins flying outside the continent.

Ghanaians love the idea about the return of a national airline and, therefore, this should not be a nine-day wonder.