Government Invites Bids for National Airline under PPP

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Government is inviting bids from private investors in the aviation sector to help it establish a national carrier under the Public Private Partnership (PPP) initiative. The new airline will replace the defunct Ghana International Airline which was solely public but collapsed after years of mismanagement and political interference.

 The Minister of Aviation, Ms Cecilia Dapaah, told the GRAPHIC BUSINESS in an interview that the Ministry was currently considering proposals from some private investors and was still open to more.

“We are not certain yet so more proposals will be welcomed. The technical team will then evaluate the proposals and shortlist them,” she stated.

She said the Ministry would know how much the airline would cost only after it was done with evaluating the various proposals.

New national airline

Following the collapse of Ghana’s former national carrier, Ghana Airways in 2005 over high indebtedness, successive governments had tried to establish a new national airline but have all been unsuccessful.

Ms Dapaah, when she appeared before Parliaments Appointments Committee, however, gave an assurance that the country would get a new national airline by 2019.

She was hopeful that the country was now ready for a new national airline that would begin operations within the ECOWAS sub-region.

“I believe that Ghana is ready to have its own carrier. At least to start with the ECOWAs sub-region and move up to regional and then take it up from there,” she said.

“I have sighted documents that can aid us have our own airline. I have talked to the Ghana Airports Company Limited, as well as Ghana Civil Aviation Authority. Feasibility studies had been done by the previous government and I believe we will have a study of the findings and add up what we have received so far and take it up from there,” she added.

She said no major decisions would be made until findings from the feasibility study have been fully assessed.

Ghana losing out

The Minister also pointed out that the country was losing out on the gains in the aviation sector due to the lack of a national airline to benefit from the market share of over seven billion airline passengers in Africa.

She said the foreign airlines had taken advantage of the ripe aviation industry and were making huge profits.

She said she would, therefore, ensure that, Ghana gets its fair share of the industry within the next two years.

“The consultants said two years, and I said we should do it in a year if possible, so between one and two years, I think that should be the period,” she said.

IATA report on airline

The position of the Minister of Aviation on the vibrant aviation sector corroborates the International Air Transport Association (IATA), Financial Monitor report for January 2017 which spells out the state of the airline industry.

The initial financial results for Q4 2016 indicate a continued solid performance for the air transport industry, albeit with ongoing signs that momentum in the profitability cycle has weakened.

Global airline share prices began the year on a positive note, rising 1.5 per cent in January and a healthy 6.8 per cent over the past year. However, the industry has lagged the overall performance of global equities on both measures, a report released and published on eTNews on February 11 said.

Abolishing of taxes

Ms Dapaah also indicated that the 17.5 per cent Valued Added Tax which had been imposed on domestic airlines would be abolished to give relief to them.

She said the domestic airlines were going through stress because of the imposition of this tax and questioned why taxes on the spare parts of international and bigger carriers were removed while that of the domestic airlines were still in place.

She also pointed out that the high cost of aviation fuel, coupled with handling charges have also contributed immensely to the difficulties the sector was currently facing.

Ms Dapaah, therefore assured the committee Parliament, she would hold a meeting with all the domestic airline operators to discuss the way forward.

MSA to be adequately resourced

The Minister also noted that she was going to ensure the Metrological Services Agency (MSA) and the Ghana Airports Company collaborates effectively to ensure that the MSA was adequately resourced.

She believed this would help the MSA to forecast properly for aviation safety.

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