Airlines opt for new planes

Domestic airlines are to take delivery of relatively new aircraft on dry lease arrangement this year, following ratification of the Cape Town Convention.

Current operators Starbow and Africa World Airlines (AWA) and returning Fly GH are both in the process of acquiring a new fleet.

Starbow is to acquire two Q400 planes on dry lease, while AWA has indicated that it is to acquire two A319s as it looks to expand its regional operations.

Royal Fly GH, successor to the defunct FLY 540 which suspended domestic operation in May 2014, is expected to operate flights from Accra to Kumasi, Tamale and later Takoradi on an ATR72-600 aircraft, based on a dry lease arrangement.

The benefits of this new-found leverage is that more local people are expected to be employed by airlines. Again, passengers should expect improved service and increased capacity on all four domestic routes -- Kumasi, Takoradi, Tamale, and Sunyani -- this year.

Eric James Antwi, Chief Executive Officer of Starbow, told the B&FT that: “The Cape Town Convention has now been ratified, which has made it easier for us to go for a dry lease. Starbow is now planning to go for a dry lease on two Q400s to operate some internal and regional flights. The aircraft is coming directly from the Bombardier Company, and it will be a dry lease. A dry lease will give us more flexibility, and it is more manageable.

“Domestic operations are not very good because of the drop in passenger numbers. We believe that we will have to start doing regional flights to stay in business. Our losses are colossal. We will start with daily flights to Liberia then Freetown, and then we will add Burkina, Niger, Benin and Cote D’Ivoire.”

Prior to ratification of the Cape Town Convention, airlines (lessees) have had to pay about US$500,000 per month to their lessors for the use of their equipment on wet lease.

The cost of aircraft leasing is expected to reduce by some 20-30 percent following ratification of the Convention, given that operators can now acquire aircraft on dry lease agreement more easily.

Wet lease arrangements constrain operators in term of foreign crew and pilots supplied by the aircraft owners. Dry lease, however, gives operators a free hand to engage locals as cabin crew and pilots.

Jessica Haizel, Business Development Manager of Royal Fly GHm told the B&FT in an earlier interview that: “Fly 540 ceased operations because it wanted to undergo management restructuring, and we have taken over from it. We believe in having a wholly Ghanaian-owned airline.

“For starters we are looking at focusing on our domestic market, doing Accra-Kumasi, Accra-Tamale and later Takoradi. Possibly in the near-future, after we have operated for a while, we will consider the west coast and even the intercontinental routes.

“We are back in Ghana because we believe that the Ghanaian market is still available, and we also want to give travellers opportunity to have other options besides the existing ones,” she said.

This notwithstanding, there are various issue that need to be addressed if the domestic airlines sector is to grow. These include revision of the 17.5 percent VAT and granting waivers to airlines for imported spare-parts.