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Business News of Friday, 14 August 2015

Source: B&FT

Domestic Airlines protest ground handling takeover

Domestic airlines are protesting the decision by the Ghana Airports Company Limited (GACL) to compel them to hand over all ground handling operations to either Aviance or Menzies.

Starbow and Africa World Airlines (AWA), the two operational domestic airlines in Ghana, presently handle their respective ground operations but, sources say, the GACL now wants ground handling companies Aviance or Menzies to handle all ground operations citing security reasons.

The cost of the two indigenous airlines handling their ground operations is comparatively cheaper than outsourcing it to the two companies who charge in dollars, airline sources said.

The tens of employees of the two airlines who handle ground operations would have to be laid off if operators are forced to hand over to Menzies or Aviance.

The issue threaten to compound the already existing problems facing indigenous carriers. Operators, over the past six months, have being recording a decline in passenger throughput.

This has largely been attributed to rising ticket prices brought on by the loss in value of the local currency and the recent imposition of 17.5% VAT on domestic airfares at the instance of the Ghana Revenue Authority (GRA).

The Ministry of Transport has since petitioned Cabinet, on behalf of the airlines, to review the decision to impose VAT on domestic air transport.