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Opinions of Saturday, 31 July 2010

Columnist: Asamoah, Gordon Newlove

The Saga Of Ghana International Airline, My View

I have been listening and observing the arguments and counter arguments about the supposed call on government to pay the salaries of GIA workers. I am both amused and amazed at the kind of arguments that have been advanced for the government to pay GIA workers. What surprises me most is the fact that a commercially viable company like GIA should call on government to pay the salaries of its workers.

Somebody should give me one good economic reason why GIA should remain in operation under the government, when it cannot even raise enough funds to run the airline. One simple principle of the theory of the firm tells us that the firm should shut down in the short-run when it cannot cover its average variable cost (operating expenses) and should shut down in the long-run if it cannot cover its average cost (total cost of production). Maybe GIA operators need an elementary economist to advise them on this principle.

In February, 2004, before the collapse of the then Ghana Airways, I wrote to warn the government (operators) about the operations of the airline but nobody listened and it eventually collapsed. Flights were leaving Ghana for London on daily basis and were always half full (half empty), even though when you go to their offices to buy ticket, you are told the flight is fully booked. I can safely say that governments in Ghana are incapable of running a viable airline successfully, so we as a country are better off disposing off GIA.
There are about 29 airlines operating in Ghana and are making profits so why is GIA’s case different? I heard Sammy Crabbe, a supposed strategic partner of GIA saying government deliberately wants to run down GIA. For God’s sake, GIA was being supported to the tune of 1.5 million dollars per month and still was not even able to breaking-even. Does this make good business sense? We are wasting such amount of money every month yet we have the gut to go out to other countries to beg for money and even borrow for developmental projects. That is bad business.
Those advocating for the government to pay the GIA workers have their own businesses and I wonder, do they go to their parents and uncles to get money to pay their workers because they (operators) are being inefficient? What a shame? I think those managing GIA should bow down their heads in shame and the government should dissolve the board of directors immediately because I do not know what they are presiding over. It is about time we get rid of our attitude that anything that belongs to the state (government with majority share) should be treated with contempt and managed anyhow.

I wish to use this opportunity to give free consultation to the government. Get rid of GIA and use the proceeds to pay the workers because they are suffering. Leave GIA to the private sector that will treat it with all the love, care and professionalism that it needs to be successful and never get involved again. Government can save good money to do more pressing development projects by not wasting money on projects that are not economically viable due to gross mismanagement.

GORDON NEWLOVE ASAMOAH
LECTURER AND PUBLIC POLICY ANALYST
KNUST SCHOOL OF BUSINESS
KUMASI-GHANA