Antrak ponders pull-out

Antrak Airlines is “seriously” considering pulling out of the country’s air space as a result of difficulties in the aviation business environment.

The Founder and Chairman of Antrak Group, Alhaji Asuma Banda, told the B&FT in an interview in Accra that challenges in getting passengers -- despite a reported increase in domestic travel figures -- a huge infrastructure deficit, high cost of doing business, and regulatory failure have made the domestic airline business unprofitable.

“I am thinking very seriously about relocating my business from Ghana because the passengers are not enough for the number of licences they (Ghana Civil Aviation Authority) issue. Also, the only airport in the country is Kotoka International Airport in Accra. The rest are all airstrips. These airstrips are accommodating aircraft that are beyond their capacity. It is a danger to the lives of people.

“Again, I spend too much money on maintenance; and if the condition of airports in the country is not improved quickly, I will move my business from Ghana. (Given) the way people are worshipping the Chinese in this country, if I go somewhere else maybe I will also be worshipped. I love Ghana, but the business operating environment is not good,” he said.

Alhaji Banda’s sentiments seem to challenge a widely-held view that the aviation industry is one of the most booming industries in the economy, attracting several airline operators into the country.

According to figures from the Ministry of Transport, domestic airline operators carried 122,000 passengers in 2009, which increased to 543,000 in 2012. In the first half of this year, nearly 400,000 people used domestic airline services -- with most of the passengers carried on the Accra-Kumasi route as they sought to escape the inconvenience of travelling by road between the country’s two biggest cities.

So far, the Ghana Civil Aviation Authority (GCAA) has issued licences to five domestic operators, out of which four are currently in operation; including Antrak, Starbow, Africa World Airlines and 540. The fifth licencee, CityLink, has suspended its services because of challenges in its operations.

Alhaji Banda said the GCAA’s ill-advised decision to continue issuing domestic airline licences is hurting industry players at a time existing operators are struggling to break-even due to lack of passengers.

“GCAA just issues licences and now everybody is suffering. Those who will go will go. I have invested so much money and I am not getting returns for my money. So I will go somewhere else. I have been thinking very seriously about relocating. I love Ghana but I cannot love the country more than my business,” he added.

The eventual pull-out of Antrak Air, a wholly-owned Ghanaian airline, could further dampen prospects in the industry following Virgin Atlantic’s decision to shut down its Ghana business this month -- citing high cost of aviation fuel.

Alhaji Banda said the cost of doing business in the industry is prohibitive, with aviation fuel taking a chunk of operators’ operating expenses.

“It is not profitable to run an airline in this country. The cost of aviation fuel in the country is the highest in the West African sub-region, and we can’t even charge the right fares to make up for the cost because they will be too expensive. The passengers, too, are not there.

“Other people are coming into the aviation industry because they think there is money to be made there, especially as we have found oil. Let them come. Those who are coming because the floodgate is open, when they come and they don’t see any light they will go back.”

Analysts say general aviation infrastructure has trailed the increase in traffic and licences.

For instance, the Kumasi domestic airport has come under immense pressure due to growth in traffic over the years.

Last year, the airport was closed after some defects were detected on the runway. It was then re-opened temporarily to receive traffic during the Christmas festivities, before it was closed again and the defects corrected.

That notwithstanding, a major overhaul of the runway is needed to bring it up to the accepted standard. Conservative estimates put the cost of the renovation and expansion works at about GH¢58million.