High fuel cost scares off airlines

International airlines are shying away from Ghana as a result of the current high aviation fuel prices, Raphael Kuuchi, International Air Transport Association (IATA) Vice President for Africa has said.

“One challenge I think needs to be addressed if Ghana’s aviation is going to move to the next level is addressing the high fuel price.

The fuel price in Ghana is not competitive compared to its neighbours. Because of this high fuel price, many of the airlines that are flying in don’t pick fuel from here.

“They rather fly to the next country and pick fuel. So we are losing out on revenues that these airlines would otherwise be paying to oil suppliers in the country. Because the fuel price is high, it is also a disincentive for some airlines wanting to come to Ghana. They don’t want to come because fuel is too expensive,” Mr. Kuuchi told the B&FT on the sidelines of the International Operational Safety Audit Programme (IOSA) certificate presentation to Accra-based Africa World Airlines (AWA).

Aviation fuel is central to the operations of an airline as it constitutes between 35-40 percent of an airline’s cost. The price of the commodity -- laden with taxes -- in Ghana is the highest in the West African sub-region.

The Kotoka International Airport (KIA) is currently serviced by about 35 international airlines. There are two operational domestic carriers who are both IOSA-certified.

While the specialised fuel is sold for about US$2.30 cents per litre in Nigeria, US$2.30 in Benin and US$1.94 cents per litre in Cameroon, it is sold for close to US$3.14 cents per litre in Ghana.

“As a result of the high fuel price, ticket prices are relatively high. If the fuel price comes down and cost of operations come down, airlines are likely to bring down their fares,” he said.

Africa World Airlines (AWA), after an intensive and rigorous process, received the International Operational Safety Audit Programme (IOSA) certificate from IATA.

AWA has subsequently been listed on the IOSA register. AWA’s certificate is valid from May 1, 2015 to May 1, 2017.

“It’s a safety and security audit programme run by IATA globally. It is not mandatory, its voluntary. But for the airlines that adopt it, it enhances their safety and operational effectiveness. It is a compilation of industry best practices and safety, and so we encourage all airlines to get it. Airlines that are IOSA-registered have the highest level of safety compared to the ones that are not IOSA.

“What this means for AWA is that today it is recognised as one of the over-400 airlines with the highest safety hallmark or credentials. Many airlines that are IOSA-registered around the world will be seeking to do business with airlines who are also IOSA-registered. AWA now has to take advantage of this and get out there to try and work with other partner airlines that are IOSA-certified and try and grow their networks,” Mr. Kuuchi said.

“With the IOSA certification, customers can have comfort knowing that an IOSA-registered airline actually complies with the stringent standards and practices governing aviation safety. “The IOSA-registered member also opens doors for alliances and partnerships with other IOSA registered Airlines. It also puts AWA on the map for good business opportunities,” Samuel Thompson, Chief Operations Officer of AWA said.