Business News of Thursday, 19 September 2013

Source: Business Finder

Aviation crisis deepens; domestic airlines remain unhappy

In spite of the hot aviation issues that have engaged the media in the last few days, government is yet to meet operators of domestic flights to discuss their grievances.

Domestic airline operators say they are unhappy about the general operating environment of the aviation industry and only last week two of the four operators announced their intention to withdraw their services and relocate into the domain of Ghana’s neighbours.

The confusion has further been fuelled by the recent dismissal of the Managing Director of the Ghana Airports Company (GACL), Mrs Doreen Owusu Fianko, by a board whose term of office had expired and was only in place by dint of the President’s extension of its term.

The board has subsequently been dissolved and according to the Ministry of Transport, a new board is soon to be reconstituted.

This development has left room for speculation as to whether or not the dismissed MD remains in office.

Airline operators have meanwhile adopted a “wait-and see attitude” as the confusion plays out.

The GACL was at 2006 charged with the responsibility for planning, developing, managing and maintaining all airports and aerodromes in Ghana including Kotoka International Airport (KIA) and the regional airports.

The Ministry of Transport has main-tained that the complaints from the industry players had not gone beyond the Ghana Airports Company Limited (GACL).

“We would want them to bring their complaints to the Ministry so we can dialogue on the way forward in terms of their operations,” Deputy Transport minister, Mrs Joyce Bawa-Mogtari said last week in a radio interview.

She pointed out that the Ministry of Transport has oversight responsibilities over the GACL so if Starbow and other do-mestic operator had taken their complaints to the airport company and heard nothing, “our doors are always open and they could have come and presented their grievances to us.”

Curiously, in using a radio station to put this message across however she is being faulted for making the same error as the airlines themselves, of discussing the impasse in the media rather than engaging the other party directly, with a view to negotiating a quick settlement.

Meanwhile the Ghana Civil Aviation Authority (GCAA) in an apparent reaction to the threats of pull out from the two operators said the Authority had already frozen the licensing of new domestic airline operators.

“We are currently not advertising for people to apply for licenses and indeed a lot of research, investigations and discussions go into issues of granting licenses to operators so at the time when we have all these complaints from existing operators about business not being competitive, the lack of passengers and they operating at a loss, it will be fool hardy to issue additional licenses.” The deputy minister for Transport confirmed last week.

In the midst of the confusion, passengers of the airlines, most of them business executives are dreading the impact of a possible pull out of the two major players on their operations.

A visit to the domestic terminal of the KIA last Thursday showed a lull in passenger turnout.

“Any such pull out if carried out will obviously reduce the number of airlines operating here and will drive up air fares,” said Mr Samuel Bonsu who was awaiting his flight to Kumasi.

“For those of us who travel to and from Tamale, if Antrak Air and Starbow should pull out of the industry, it will be left with Africa World Airlines and that is a very small 45-seater jet, and it will be far from satisfactory in terms of travelling domestically by air,” Mr John Asigri, another traveller told the Business Finder.

He touches down in Accra from Tamale almost every day and heads back immediately after completing his transactions.

The alternative, should the threats materialise will be that the numerous passengers may have to revert to road transport with its attendant risks and inconvenience.

Its more costly going by road - because of high fuel and vehicle maintenance costs - than by air and especially the Accra-Kumasi road is not at all safe.

In the first half of this year, nearly 400,000 people used domestic airline services - with most of the passengers carried on the Accra-Kumasi route as they sought to escape the inconvenience of travelling by road between the country's two biggest cities. Road travel to and fro between Accra and Kumasi or Takoradi on the same day is difficult. For the more distant destinations, Sunyani and Tamale, it is impossible.

“Initially we had only Antrak but now we have more than one and its made travelling a lot more easier. But if care is not taken and we stifle the industry, it will cost us a great deal,” another business executive told this reporter.

Indeed, over the past two years, since three more domestic airlines commenced operations, fares have gone down in US dollar terms - by as much as 25% on some routes - due to intense price competition for market share.