Ghanair is deep in debts

The Chairman of the Board of Directors of Ghana Airways, Dr Sam Jonah, on Tuesday, gave an insight into the current trends and shortfalls in the airline at a media briefing in Accra. He said that the airline was in debt of $127 million, both locally and abroad, a situation which needed to be remedied as early as possible to save the company.

Dr Jonah stated that as at March 2001, the airline owed 64.9 million dollars to its key trade creditors. They are the IATA clearing House, $7,365 million; AJ Walters $3,986 million; Alitalia (DC 10 maintenance) $6,175 million; Atitec (DC 9) $1,007 million; ASECNA $2,053 million; SkyJet, $3,474; Air BP, $2,979 million and the JFK International Air Terminal, $0.396 million.

He said payment for almost all of the trade creditors were overdue. According to Dr Jonah, the board also inherited foreign and local loans to the tune of $62.05 million for which the company’s facilities were pledged against. At the local level, the airline owes the Consolidate Discount House (CDH), ?10.048 billion which should have been paid in January, last year at the interest rate of between 34 and 56 per cent.

It owes FIDELITY ?21.484 billion at 49 per cent and the due date was September 2001 while it is indebted to the Ghana Commercial Bank (GCB), to the tune of ?3.10 billion at the interest rate of 42 per cent. Touching on securities pledged against the loans, Dr Jonah said Ghana Airways had used the Airways Catering Ltd and the Accra City Hotels (Novotel) as collateral against the loans granted by CDH.

The airline has used its DC9-9G-ADU aircraft to guarantee the $7,079,205 loan secured from the Ghana Ports and Harbours Authority (GHAPOHA), the head office building (White Avenue) against the GCB loan while its Kisseman Estates serve as a collateral for a loan contracted at MerBank.

The Board Chairman said Ghana Airways employed 1,407 staff for its five aircraft, making it 282 per aircraft as compared to the 25,793 employees of the KLM which operates 130 aircraft or 199 employees per aircraft or the 62,175 employees at British Airways which has 373 aircraft or 167 employees per aircraft.

He stated that the past September 11 issues had caused the airlines American passengers to go down by 40 per cent, together with 40 per cent in revenues while tax insurance had gone up by 17 per cent.

Dr Jonah said between April last year and March this year, staff cost of the airline was $5,727,717 representing 4.4 per cent of total operating cost while aircraft operating cost of $76,964,878 dollars was 59 per cent of operating cost. He said under the circumstances the options available were the recapitalisation by the government and a joint venture to run the airline.

The board chairman pointed out, however, that the board had put in specific measures to keep the airline on its feet. These include the re-negotiation with some of the creditors, the insistence on the provision of up-to-date financial information and the suspension of unprofitable routes, which saved the airline $1,699,918 dollars last year.

Other measures are the suspension of 30 per cent of staff salaries and overtime allowance as well as a 40 per cent reduction of per diem and the reduction in number of official mobile phones.