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Opinions Tue, 25 Aug 2009

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Ghana International Airline: Exploring new flight routes

A Ghana International Airline (GIA) the nation’s flag carrier is reported to be having problem getting passengers on its London – Accra route. According to GIA reports there is a massive drop in figures for passengers plying London to Accra for the last few years. This report is a bit worrying because apparently this route could be one of the profitable and lucrative routes for GIA all things being equal. GIA is attributing the decline to errant sale agents bent on sabotaging the activities of GIA. Well a decline in passengers on the Accra – London route doesn’t sound good and it’s very necessary GIA put in the necessary measures to get passengers flying on this route again.

Branding

The problem is GIA is unfortunate to have inherited a very bad image from the defunct Ghana Airways. The company was noted for its poor customer satisfaction records. The primarily concerned of any meaningful organisation is to provide excellent customer service, and to add value to the customers experience at different stages in the value chain. This was something the defunct Ghana Airways failed to deliver on. It failed to provide good quality service and paid little attention to customer feedbacks on the service they provide in order to improve their services. Flights were cancelled at will without considering the damage effects on customers. There were also so many flight delays which often results in some customers loosing business opportunities. All these resulted in lack of customer confidence in the airline.

Customer Service rules of 10s

GIA need to work hard in carving its own brand name or image to steer away from the bad image of its predecessor. In order to achieve this it needs to be concerned with a vigorous customer services drive and value added services. A study conducted by Institute of Customer Service (UKCSI) revealed that a dissatisfied customer is likely to tell up to 10 people about his / her disappointments and 13% of that will tell about 20 other people. The customer service rules of 10s also states that it takes just 10 seconds for a customer to lose his/her respect for a company but about 10yrs for the damage to be repair.

Looking at the above its imperative that the damage caused by GIA’s predecessor to its image is enormous and lot need to be done by the company to regain confidence of customers. For instance GIA must strive to attain a very good departure records. It also needs to reduce its flight cancellations and delays to barest minimal level. In fact GIA requires a holistic branding package which could also mean adopting a new name or image. The name Ghana International Airline reminds customers of the old Ghana Airways and brings back bad memories for customers who had to spend days sleeping at the corridors of Kotoka or Heathrow because of cancellation or delays.

E-ticketing

The recent introduction of e-ticketing by GIA could be described as a very good strategic decision. The airline is the first African carrier to be operating e-ticketing system. This is done via the airlines’ website and other online channels. This innovation will not only reduce their cost of operation with regards to payment of commission to travel agents but will also bring them abreast to new innovations in the airline industry worldwide. It will also reduce their administration costs.

Ticketing increases cost of operation for airlines. Due to this most airlines are trying to eliminate ticketing from their system of operation in order to reduce cost. The ‘no frills – low cost’ airlines like Easy jet, Ryan Air etc have records of operating ticketless system to perfection. They depend on online booking for most of their booking services. Easy Jet for instance takes about 90% of its bookings online and other airlines such KLM have introduced e-tickets where electronic tickets are emailed directly to customers.

Airport charges

One area GIA could start considering with regards to cost cutting is flying from inexpensive airports in either UK or Germany. Comparatively such airports have much lower airport charges. Flying from airports in London or Düsseldorf would only double the price of their ticket. The emergence of cheap chartered flights run by companies such as Lycafly.com etc has made the industry very competitive. These companies offer promotional prices which are very attractive particularly to students. Currently Lycafly.com sells a return Accra- London ticket for £388 and KLM is selling the same ticket for £398. These offers are threats to GIA so it needs to start looking at ways of reducing cost in its operations to remain in business.

Exploring new flight routes

Accra - London route is regarded by GIA as prestigious and cosmetic route because it yields very little profit compared to the Düsseldorf route. Short haul flights along the West Coast of Africa are even considered to be more profitable with very good future prospects than the Accra - London route. Well there is no point in plying an over crowded Accra - London route which has a very strong competition when other routes could be explored.

GIA could consider landing slot in any of the smaller airports in the northern part of England. Manchester or New Castle airports would have been ideal but that will mean paying higher airport charges. There is quite a sizeable amount of Ghanaians and other West Africans concentrated in Northern England and the Midlands. These people usually travel to London to catch flight to Ghana or other West African countries. The presence of GIA in any airport in the North or Midlands would likely have a good patronage.

Currently KLM is market leader in the region. It City Hopper planes flies from Manchester and Humberside Airports on regular basis. Customers flying KLM from these airports to Ghana had to make a transit through Schipol in Amsterdam. There is the inconvenience of spending hours waiting at Schipol in order to catch a flight to Accra. If GIA enters the market it will have a competitive advantage of flying customers direct to Accra.

GIA also needs to concentrate on satisfying its existing customers rather than spending money in trying to woe new ones. This is because according to a survey conducted by Institute of Customer Service (UKCSI) in 2007 65% of annual sales of companies usually comes from existing satisfied customers and not new ones. The report went on to say that it cost 5 times more money for companies to find a new customer than to maintain an existing one.

Share holding

Currently the government holds 70% shares in GIA making it the majority share holder. The remaining 30% is owned by a US consortium (GLA – USA). Considering the apathy displayed by people put in charge of government businesses the idea doesn’t sound good whatsoever. A lot of examples abound. There was the Ghana Telecom (GT), the defunct Ghana Airways, GWSC etc. The airline business is very competitive and volatile. If they in doubt they should find out from British Airways (BA). The airline has just declared a pre-tax loss of £401. Such a business needs to be run purely on commercial basis with the primary aim of making profit. It is therefore imperative for the government to offload its 70% shares to private investors who will run it more efficiently.

Conclusion

GIA must be regarded as business entity and must be run as such with a paramount aim of increasing share holders wealth. Anything short of this will spell a doom for the airline particularly in these turbulent times when the financial crisis is affecting a lot of companies around the globe. The company has done so well in developing its own Ghanaian crew made of pilots, cabin crews etc so what it needs now is stability.

Francis Kwaku Egu, UK

Kwakuhull@yahoo.com

Columnist: Egu, Francis Kwaku

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