Ghana Airways Explains Debt Situation to JoyFM

The management of the national carrier, Ghana Airways has explained that the airline’s estimated debt of 150 million dollars was accrued through operating losses since in 1991. The airline says investments in airplanes and new routes started in the late 1990’s are largely responsible for the heavy debt burden.

Chairman of the Management Task Force, Captain Kofi Kwakwah told JOY FM that airline’s debts increased from 27.7 million dollars in 1991 to 55.3 million dollars in 1998. It soured by 32 .5 million dollars in 1999 and a further 45.5 million dollars in the year 2000 taking the total debt to 129 million dollars. Last year, the airline recorded loss of 23.5 million dollars taking the total debt to 150 million dollars.

According to captain Kwakwah the airline has over the years borrowed heavily to finance its operations. In 1999, the aircraft borrowed 41.9 million cedis to acquire an aircraft. In 2000, it acquired another aircraft from Malaysia.

The non-profitable routes have been suspended. According to Captain Kwakwa, although studies showed that Ghana Airways could not support the Dubai route, the airline went ahead to operate it. The airline was making losses of 140,000 dollars on every trip it made to Dubai until it was suspended.

The airline currently relies on surpluses from its debt payments for service its recurrent expenditure. But he thinks it can still survive given the needed push. “The airline makes $120,000, the airline owes $150,000 to creditors and banks. If we can raise $250 million, nobody will talk about the $150 million and that is achievable.” The weekend grounding of the airline by one of its creditors in Dakar has highlighted the vulnerability of the national carrier to its many creditors.