New national airline: Ethiopian, Air Mauritius lead the pack

July 7, 2017
Source: Dominick Andoh and Eugene Davis/thebftonline.com
New national airline: Ethiopian, Air Mauritius lead the pack

Addis Ababa-based Ethiopian Airlines and Air Mauritius are being considered by government as strategic partners for the establishment of a new national airline.

 

Aviation Minister, Ms. Cecilia Dapaah, said: “Ethiopia Airlines has expressed interest as well as Air Mauritius, we are looking at all this to make sure Ghana becomes a hub. We are talking to all the airlines.”

Ghana is seeking to establish a new national carrier, following the collapse of Ghana Airways and the failure of its successor, Ghana International Airlines.

For the proposed new national carrier, government is seeking a strategic partner with the financial muscle, global distribution network, and requisite experience.

Government, in an expression of interest published in June 2016 said: “The feasibility studies [for the establishment of a new national carrier] also demonstrated the new national airline will require partnership with an experienced strategic airline partner that has a global distribution network to adequately take advantage of opportunities in the market place”.

The partner, the EOI also notes, ought to have good financial strength; technical strength in areas of IT systems and flight operations; maintenance yield and capacity management; good distribution network; and be a member of a global alliance.

 

Ethiopian Airlines (Ethiopian), one of the two leading airlines under consideration, is the continent’s fastest growing Airline in Africa. In its seven decades of operation, Ethiopian has become one of the continent’s leading carriers, unrivalled in efficiency and operational success.

 

The airline commands the lion’s share of the pan-African passenger and cargo network operating the youngest and most modern fleet to more than 95 international destinations across five continents.

 

Air Mauritius, on the other hand, is the flag carrier of the island nation of Mauritius. Created in 1967, it currently serves about 24 regional and international destinations. It operates flights to and from Europe, Asia, Australia, and Africa.

 

Ms. Dapaah, who was speaking during a courtesy call on her by the Canadian High Commissioner, Heather Cameron, said she was optimistic that transit passenger volumes will also increase after the competition of the New Terminal 3 at the Kotoka International Airport (KIA).

“When we finish building our new Terminal, we will have passengers who will transit in Accra. We are pursuing that with a lot of vigourous energy and we need partners like Canada to be on board this ship that is floating to make sure we realise our dream.”Ms. Dapaah said.

Latest Ghana Airports Company Limited data show that international passenger throughput has increased from 361,601 at the end of the first quarter of 2015 to 402,441 as at end of the first quarter 2016; an increase of about 11.3 percent.

 

Transit passenger volumes increased from 14,000 in July 2015 to over 22, 000 in July 2016. 2017 first quarter figures also show an upward trend.

 

Canada offers to help

 The Canadian High Commissioner, Heather Cameron, indicated that her country is keen on deepening its relationship with Ghana in various ways for the mutual benefit of the two countries.

She said, Canadian, whose aviation sector is worth some US$28billion is ready to help Ghana achieve its vision of a successful and profitable national airline.

“Ghana is growing and the environment is changing, we are excited about the vision in tourism and aviation as well as oil and gas. We are excited to see where the vision will take Ghana. We also have oil and gas in Canada, not only on-shore but off-shore too and we will be pleased to share that,” Ms. Cameron said. 

The role of domestic airline

 

The Aviation Ministry has indicated its preparedness to support domestic airlines expand their operations in the country to make it easier for the public to travel in-country and for them to be able to provide the feed for the proposed national carrier.

 

Ms. Dapaah explained that the Ministry is eager to see people travel in a triangular form such as Accra-Takoradi-Tamale. It should be possible. That direct route should be looked at.

The two surviving domestic airline operators, Starbow and Africa World Airlines (AWA) currently operate flights from Accra to Kumasi, Sunyani, Tamale and Takoradi.

Inter-regional flights between Kumasi and Tamale that was started by Antrak has long been abandoned, due largely to the lack of adequate traffic on the route and the high operational cost the defunct airline and others after it had to contend with.

Domestic air fares were reduced in April in response to the abolishing of the 17.5 percent VAT on domestic air transport. Government is expected to take a GH¢21.11million hit in relation to the abolishing of the VAT on domestic air transport.

Passengers traveling by air between Accra and the four main domestic airports in the country--Kumasi, Sunyani, Tamale and Takoradi are now paying 17.5 percent less.

Accra-Kumasi one-way ticket, for instance, has dropped from about GH¢320 to about GH¢265  on both Starbow and Africa World Airlines (AWA).

Mr. Eric Antwi, CEO, Starbow, told the B&FT in an interview that: “The removal of the VAT will lead to a fall in airfares. When something is also done about the duty on spare parts, ticket prices will drop further.”

A chequered past

After the collapse of Ghana Airways, the former national flag-carrier, government invited private participation in the establishment of a new national airline.

In 2004 Ghana International Airlines was established, with 70 percent shares held by GoG and 30 percent held by a US consortium GIA-USA. Faced by a myriad of issues, the airline went down in 2010.

On the domestic front, CityLink suspended service in August 2012; Fly540 in May 2014; and Antrak in June 2015 largely because of difficult economic and aviation operating environment.

Aviation analysts believe that the new airline should rather look inward and dominate the continent before venturing to other long-haul routes.

They also contend that indigenous carriers, all of whom are IOSA certified, should be supported by government to expand their regional foot prints-- in the case of AWA, and be supported to launch their regional operations to create jobs and help grow the industry.

Ms. Dapaah, since assuming office, has promised to ensure a favourable operating environment for indigenous airlines, as her ministry seeks to grow the sector.