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Business News of Saturday, 27 June 2015

Source: B&FT

Fly540 to resume operations soon -- GCAA

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The public is expected to benefit from more air travel options from Accra to the four major domestic destinations as FLY540 airline is expected to resume its operations soon, following acquisition of the airline by new investors.

Travellers currently have to choose between Africa World Airlines (AWA) and Starbow for all domestic travels following the suspension of flights by Antrak for operational reasons.

The two remaining carriers have had to increase flight frequencies to cater for the gap created by the suspension of Antrak’s operations.

Mr. Martey Boye Atoklo, Acting Deputy Director General (Technical) of the Ghana Civil Aviation Authority (GCAA) said: “Fly 540 has had a change of name, but the Board of Directors remains the same. It’s now been renamed Royal fly540 and we expect them to soon start operations. There are plans to bring new aircraft and start operations; it’s all about the equipment. They have cleaned their house, and with the change of name should come a change of approach to their operations”.

Fly540 Ghana -- one of four domestic airlines in the country, in May last year suspended its operations as part of a restructuring exercise by its former parent company, Fastjet, to focus its efforts on East and Southern Africa.

It subsequently wrote to the Ghana Civil Aviation Authority (GCAA) informing of its decision to suspend operations in Ghana

Fastjet in a statement said: “As previously announced, Fastjet has concluded that although Ghana presents very significant long-term opportunities for the Fastjet low-cost model, in the short-term the company intends to fully focus on the considerable potential of opportunities in East and Southern Africa”.

However, Fastjet this week sold its interest in Fly540 Ghana for a reported nominal consideration of US$1 in cash to DWG-G Company Limited.

Ed Winter, Fastjet’s CEO said: “The disposal of Fly540 Ghana is a great step forward in fastjet’s restructuring plans for our legacy businesses. While West Africa remains of interest to us as a low-cost market in the future, our current focus is on expanding our footprint in Eastern and Southern Africa. Fastjet has retained the right to discuss introduction of the Fastjet brand in West Africa when it considers the economic conditions and infrastructural environment to be more favourable”.

“We expect the best from them, and we need to look at the local operators and address their challenges because it is important for air travel. We hope that the Cape Town Convention will be approved by Parliament in the amendment to the Civil Aviation Act. If that is approved, it will be good for all of us,” Mr. Atoklo said.

The Cape Town Convention is a treaty designed to facilitate asset-based financing and leasing of aviation equipment, expand financing opportunities, and reduce costs; thereby providing substantial economic benefits. It does so by reducing a creditor's risk and by enhancing legal predictability in these transactions, including in case of a debtor's insolvency or other default. The Cape Town Convention entered into force in 2006.

However, Ghana is yet to ratify the convention -- a situation that the airline says is inimical to growth of domestic aviation.

Passengers are expected to benefit from approval of the Cape Town Convention, with improved service and increased capacity on all four domestic routes -- Kumasi, Takoradi, Tamale, and Sunyani.

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