Business News of 2013-12-11

Consider local partners for national airline - Togbe Afede

The Agbogbomefia of the Asogli State, Togbe AfedeXIV, has advised the government to “look within” in its quest to select a private partner for a national airline.

He told the Daily Graphic that he was, in principle, for a strong bidding process opened to all for the selection of a future partner and that there were Ghanaian companies with the proven management competence, the technical and financial muscle, as well as the pedigree, to play that role.

Among other advantages, Togbe Afede saw a Ghanaian partner using Accra as the operational base for the national carrier.

“With a national carrier that is sure to become a major player in West Africa, this will be a dream come true for a government that is seeking to make Accra the aviation hub of the sub-region,” he said in an interview aboard an Embrayer - 145LR belonging to Africa World Airline (AWA), which was making its maiden flight to Nigeria, the first by a private Ghanaian airline since 1957.

To the question as to which Ghanaian company had the competence and experience to play that role, Togbe Afede cited the example of AWA which, he said, was technically, financially and operationally experienced enough to work with the state in a public/private partnership arrangement to own and operate a national airline.

Africa World is a Ghanaian-Chinese company, with Strategic African Securities (SAS) and the Social Security and National Insurance Trust (SSNIT) representing the Ghanaian stake, in partnership with the Hainan Airline of China and the China-Africa Development Fund (the CAD Fund).

“In terms of fleet, AWA’s shareholder, Hainan Airline owns more than 100 planes. Reputed to belong to the exclusive club of five-star airlines of the world, it is the largest privately-owned air transport company and the fourth-largest airline in terms of fleet size in the People's Republic of China, operating scheduled domestic and international services on 500 routes to Europe, America and Africa. That’s a lot of operational experience to draw from.

“Talk of finances, AWA’s other Chinese partner, the CAD Fund, had, as of 2010, invested in 30 projects in Africa worth around US$800 million. The fund is a shareholder in the Sunon-Asogli Power Plant in Ghana.

“Through SSNIT, Ghanaian contributors are part owners of AWA and will, by extension, be part owners of the proposed national airline if the government goes with AWA,” he said, pointing out that in spite of the Chinese being majority shareholders, the company “has been, is and will remain a Ghanaian company. For instance, out of its 116 staff, only four are Chinese.”

Meanwhile, AWA is embarking on an ambitious expansion project to increase both fleet and destinations. With effect from the second quarter of next year, the airline has plans to fly to Sao Paulo, Brazil, taking advantage of the ever-increasing cultural and trade ties between Ghana and Brazil.

To this end, it will take delivery of an Airbus 319, a bigger 100-seater aircraft.

Regarding West Africa, Togbe Afede said, “Lagos is only the beginning. We have applied for designations to Dakar, Monrovia and Freetown. By the end of 2014, we should be in many West African states. Our plan is to create a hub from which to fly passengers from these West African states to join our bigger aircraft to Europe, the Americas and Asia.”

The AWA maiden flight to Lagos last Monday was an impressive ceremony. Joined by officials of Nigeria’s Civil Aviation Authority and travel agents.

With Monday’s inauguration, AWA is designated to fly to Lagos twice a day, beginning yesterday, Tuesday, December 10.