Plans for home-based carrier alive despite coronavirus setback - Minister

Despite the impact of the COVID-19 pandemic on the aviation sector, the Aviation Ministry has indicated that it will continue engaging investors to reach an agreement soon for the establishment of a national carrier.

“On the home-based carrier, it is my intention to push on with the initiative and to engage investors, hopefully, to conclude a deal getting to year-end to ensure that we can take off, if not by then, perhaps going into the coming year,” Aviation Minister Joseph Kofi Adda told Business24 in an exclusive interview.

“I think the challenges posed by the pandemic give us an opportunity to lead the way in the sub-region and sustain the vision set by the president—and, more importantly, to get the country to benefit from the numerous benefits that aviation has for the nation.”

Coronavirus-induced border closures and movement restrictions have pushed the global aviation industry almost to the wall, with major international airlines cutting thousands of jobs and asking governments for bailouts.

The International Air Transport Association (IATA) estimates that the pandemic could cost the industry about US$250bn this year.

According to IATA, worldwide flights were 70 percent lower at the start of the second quarter of this year.

The association predicted a further decline as restrictions rise in a number of regions. It projected that though airlines have little or no revenue coming in, they have to spend about US$60bn in the second quarter, as “some costs cannot be avoided and ticket refunds [are] also burning cash.”

In Ghana, international air travel remains suspended, with the country’s borders closed since March 22. Meanwhile, domestic airlines lost an estimated US$4.5m in revenue for the four weeks they were not able to operate because of the restrictions on movement imposed in March to help contain the raging pandemic.

An assessment by Airports Council International (ACI) backs the data presented by IATA. ACI’s World Director-General, Angela Gittens, believes that the impact of the pandemic may persist well into 2021.

“The coming year will pose major challenges for the industry, as travel restrictions and lockdown measures continue to impact the industry. Since we can expect that a global recession will take hold, it is now likely that the impacts of COVID-19 may be felt well into 2021,” she said.

Likely partners feel the heat

Air Mauritius was among the first five companies who expressed interest in partnering the government of Ghana for the establishment of a new flag-carrier.

The island nation’s carrier has now gone under after its board announced a decision to put the airline under voluntary administration.

The airline in a statement said due to travel restrictions and the grounding of its fleet, there has been a “complete erosion of its revenue base” which left it unable “to meet its financial obligations in the foreseeable future”.

South African Airways, which also expressed the desire to partner government at the early stages of the project, has also gone under after years of state-funded bailouts failed to turn around its fortunes.

South Africa’s public enterprises minister, Pravin Gordhan, said the airline’s stakeholders “have agreed on a long-term vision and strategy [for] the creation of a new dynamic airline.”