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Business News of Saturday, 15 August 2015

Source: B&FT

Dana Air entry heats up Accra-Lagos competition

Passengers travelling on the Accra-Lagos route are expected to enjoy reduced fares and improved services in the coming months, as Nigerian carrier Dana Air is set to become the third carrier to ply the route.

The Ghana Civil Aviation Authority (GCAA), upon inspection of Dana Air’s aircraft and facilities at its base in Murtala Mohammed Airport Terminal 2, has given permission for the operator to start flying the route in line with the existing bilateral agreement between the two countries.

“Ghana has a bilateral agreement with Nigeria, which allows for multiple operators on the route until such a time that we think a cap should be placed on it. We have inspected their aircraft and facilities, and have given permission for Dana to fly the route,” Mr. Martey Boye Atoklo, Deputy Director General-Technical, GCAA, told the B&FT.

Two Nigerian carriers, Aero and Arik Air, and Ghanaian carrier Africa World Airlines (AWA) currently fly the Accra-Lagos route.

Starbow, an indigenous Ghanaian carrier, was also last year granted permission to operate flights between the two countries by Nigeria’s civil aviation authority.

One-way tickets from Accra to Lagos currently cost about GH¢400, with a return ticket priced at about GH¢800.
With the capacity of the three airlines expected to enhance competition, consumers will be the ultimate beneficiaries with lower fares, better safety and quality of service expected to inform consumer choice.

Dana Air had its license suspended after a challenging three-year period, in which one of the airline’s planes was involved in a fatal crash in Lagos. The airline’s licence was restored in January this year

It currently operates domestically with flight from Lagos to Abuja, Port Harcourt, and Uyo. It also operates flights from Port Harcourt to Abuja and Uyo-Abuja routes using its fleet of Boeing McDonnell 83 and Boeing B737-500 aircraft.
The two other Nigerian carriers also operate a significant fleet size within the populous West African country and to other destinations on the continent.

Arik, for instance, has a fleet size of about 26 including Airbus A330-200, Boeing 737-800, Boeing 787-9, Bombardier CRJ1000, and Bombardier Dash 8 Q400. On the continent, it operates flights within Nigeria and from Lagos, Nigeria, to Accra, Ghana; Bamako, Mali; Ouagadougou, Burkina Faso: and the Cameroonian capital, Douala.

Analysts told the B&FT that the growth in number of Nigerian-based carriers should spur Ghanaian operators into building their capacity and investing in their IT infrastructure if they are to compete.

Africa World Airlines currently operates an ERJ-145LR aircraft. It is expected to take delivery of two Airbus A319s to complement its existing fleet in view of the expected growth.

Starbow, the other Ghanaian operator with all the rights to ply the Accra-Lagos route, operates a BAe 146-300 , BAe 146-200 and a Bombardier Dash 8 Q400.

Increasing transit passengers figures show that prospects in the sub-region for Ghanaian carriers going forward are enormous.
Transit passengers increased from 162,000 in 2013 to 178,000 in 2014, representing an increase of some 9.5 percent.

AWA has also entered into a codeshare arrangement with South African Airways (SAA) that will see the Ghanaian carrier selling SAA tickets in Ghana and Nigeria. This will make it possible for passengers in Nigeria to purchase a ticket to Washington with AWA and fly into Accra to catch SAA flight to Washington DC.

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