Ministry blames Lufthansa for flight hiccup

Accra, July 18, GNA - Ms. Gloria Akuffo, Minister for Aviation, on Wednesday lashed out at Lufthansa, the German Airline, for its withdrawal from the Accra route saying the manner in which it was executed smacked of bad faith.

"Lufthansa's withdrawal and the manner in which it was executed smacks of bad faith which the Ministry regards as rather unfortunate," she said in a statement issued in Accra."


"Therefore, Lufthansa alone is responsible for the repercussions of its conduct," Ms Akuffo added.


Ms Akuffo said in view of the good relationship that had existed between Ghana and Germany, the Ministry and therefore Government were nonetheless determined to pursue a successful resolution of all the issues arising out of this matter provided Lufthansa was willing to reciprocate the gesture in the larger interest of the two countries. She stressed that the Ministry of Aviation did not order either the stoppage or withdrawal of Lufthansa's operations into Accra. Giving the background to the case, Ms Akuffo said for over three years now Lufthansa had been operating seven flights per week into Ghana.


Two of these flights were granted by the Government of Ghana under a normal Bilateral Air Services Agreement(BASA) between the Governments of Ghana and Germany while the additional five were also granted by Government of Ghana as part of a commercial agreement between Lufthansa and the then Ghana Airways Co. Ltd.

Royalties payable for the additional flights were to be paid to Ghana Airways as part of Government's capital infusion into the airline.


She said under the Commercial Agreement, Lufthansa was to pay royalties for the use of the additional frequencies by picking up Ghana Airways passengers on its Accra-Lagos route and back.


"In February 2005, Lufthansa unilaterally without just cause nor any notice to Ghana Airways refused to pick up Ghana Airways passengers, thereby defaulting in its payment for the royalties of the five additional flights."


She said after Ghana Airways went into liquidation in June 2005, the Official Liquidators (OL), as part of its effort to meet creditor debts, made a demand on Lufthansa for the payment of the debt arising out of the default.

She said royalty payment realisable from the sale of GH tickets on the Accra-Lagos route averaged $150,000 per month.


"Lufthansa's default ran for a period of over two years and notwithstanding the many demands made by the official liquidator, Lufthansa persisted in its default while it continued to utilize the five additional frequencies even up until the last day of its withdrawal of operations in Ghana leaving in its trail an outstanding debt which originally stood at over $4,000,000."


She said consequently in June 2006, the OL, out of frustration sought the intervention of the Chief of Staff and Minister of Presidential Affairs who was also responsible for the Aviation Portfolio.


Ms. Akuffo said the request of the Chief of Staff to Lufthansa prevailing on them for a speedy resolution of the matter went unheeded. Subsequently, she also wrote to Lufthansa making substantially the same request, but this also went unheeded.

"The Minister for Aviation was therefore constrained to direct both the OL and Lufthansa to resolve the matter within a period of a month, dating from the 30th of May, 2007 or risk having the five additional frequencies withdrawn by Government."


Ms. Akuffo said Lufthansa's response to this last letter was "to bait the Minister and a team with an offer of an all-expenses paid trip to Germany ostensibly to resolve the matter' but they turned it down. The Minister said eventually a Lufthansa group met with representatives of the Ghanaian side, at which meeting Lufthansa requested for up to the end of the year to settle the matter with the OL.


"Naturally this was refused by the Minister on the ground that all the issues had already been clearly identified and what remained was a matter of the parties seriously committing to a settlement."


Ms Akuffo said before the end of the June 30 deadline, the parties met in Germany and succeeded in substantially concluding an agreement in which the OL agreed to accept the sum of US $1,200,000 in total and final settlement of the original claim of over US $ 4,000,000. A draft text of the terms of agreement has since been submitted to the OL by Lufthansa, she said.

Ms Akuffo said a number of issues, however, arose out of the draft terms of agreement that was submitted by Lufthansa.


These are whether or not the Ministry of Aviation should be a signatory to the settlement agreement, the terms of payment of the agreed sum of US $1,200,000 and demand by Lufthansa for a letter from the Ministry of Aviation to abrogate a purported Commercial Agreement between Lufthansa and Ghana International Airlines Limited (GIAL) in respect of the same five additional frequencies under discussion. Ms Akuffo said before the OL could make a response to the draft terms of agreement, Lufthansa demanded that the agreement should be signed in the draft form without any amendment whatsoever, a position which was rejected by the OL.


She said in the meantime, the Minister for Aviation having seen that progress was being made by the parties in reaching an agreement, granted three extensions, 7th July, 14th July, and 21st July 2007 respectively to the deadline of 30th June, 2007 to allow the parties to conclude the agreement.


"It therefore came as a surprise when Lufthansa announced the withdrawal of its operations on the 15th of July, 2007 through the media, a decision which the Ministry finds rather bizarre and the motive still unclear," Ms Akufo said.