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Business News Sat, 14 Jul 2018

New airline imminent - Deputy Minister

Government is to settle on a strategic partner for the proposed new home-based carrier in the coming months, as the modalities are ‘far advanced’ and various stakeholder engagements are almost complete.

B&FT sources have confirmed that strategic meetings have been held with senior officials of Air Mauritius and Ethiopian Airlines—while planned meetings with two other airlines are expected in the coming months.

“Plans are also far advanced to establish a home-based carrier with private sector participation,” Aviation Minister Ms. Cecilia A. Dapaah said in a speech read on her behalf by Mr. Kwabena Okyere Darko-Mensah, Deputy Minister for Aviation, at the maiden edition of the AviaTour Conference held in Accra.

“Aviation is an increasingly important mode of transport for tourism markets. While geography has meant that in modern times air travel has always been the dominant mode for long distance travel and much international tourism, moves toward deregulation – and in particular the emergence of a low-cost carrier sector – have also increased aviation’s significance for short- and medium-haul tourism trips.

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“Thus, developments in aviation have very major implications for many leisure and business markets, making aviation and tourism mutually dependent,” Mr. Darko-Mensah said.

Need for a new airline

Successive governments have expressed their desire to behold a plane bearing the flag of Ghana on its tail – an embodiment of the soul of the nation – back in the skies more than a decade after the demise of Ghana Airways.

The desire is yet to bear fruit. The processes have been long, rough and beset with policy changes over the past decade.

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With the pro-business approach of the Akufo-Addo-led administration, the desire to see the black star on the tail of a plane has been ignited and moving very fast, given the growth of tourism globally and in the sub-region.

The aviation sector has been growing by about 8 percent annually over the past decade. In 2017, total international passenger throughput – arrivals and departures – hit 1.8 million.

Government is seeking to establish a new national airline to tap into current growth in the aviation sector of Ghana, and the projected growth in the sector globally over the next 20 years.

Global passenger traffic grew impressively again in 2016 with 6.3% year over year growth, supporting an increase in the passenger fleet of aircraft over 100 seats to over 19,000 aircraft, and also supporting record levels of deliveries from the manufacturers.

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The latest Airbus Global Market Forecast 2017-2036, titled ‘Growing Horizons’, shows that over half of the world’s tourists who travel across international borders each year are transported by air. Air passengers benefitted from oil prices which remained relatively low, with airlines able to choose between stimulating the market through lower yields and therefore ticket prices, and their margins.

Funding for a new national airline

The airline business is a capital intensive endeavour and requires sustained spending over an 18-month period to stand a chance of realising any profitability on a new route.

Leasing of aircraft, aviation fuel, navigational charges, and ground-handling are all dollar-denominated and require huge financial outlay.

The indication from government is that public funds are not going to be sunk into this new enterprise. Government, acting through the Aviation Ministry, is expected to select an international airline with the financial muscle, worldwide reach and fleet whose proposal fits into its vision of making Accra an aviation hub in the sub-region.

Government is expected to facilitate the process for establishing the new carrier and hold a carried interest in the new entity – in exchange for the use of various national assets such as routes rights and national emblems among others.

Accra already plays host to a large number of international airlines from Europe, North America and Asia. Some prominent international and regional airlines operating flights to and from Accra include: Air France, KLM, Turkish Airlines, Brussels, British Airways, TAP Portugal, Emirates, Delta, Ethiopian, South African Airways, Air Namibia, Rwandair, Africa World Airlines, Air Peace and Arik Air among others.

Ghana’s fastest-growing regional airline, Africa World Airlines (AWA), is on the IATA register and is expanding its regional operations – recently launching new services from Accra to Freetown and Monrovia. It also operates flights between Accra and Lagos and Abuja in Nigeria.

Source: thebftonline.com