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Opinions of Thursday, 11 March 2004

Columnist: Assan-Mensah, Edward

There is Hope For Ghana Airways

IT IS NOT ?ANOTHER ECONOMIC MISHAP??

Airlines do not generate profit by filling up the plane with passengers and cargo to full capacity as most people think. There is certain operating cost factor that is taken into account. You don?t have to fill up the plane because there is room for 300 hundred passengers and a cargo capacity for 90,000 pounds. Remember this is not a Tro-Tro business that runs on diesel or cheap regular petrol.

I took time to examine areas that are affecting airlines revenue growth, and discovered that, often some of the lease agreements are excessively high and due to fluctuation in revenue growth, the lease payments are not kept as agreed, thus causing higher interest charges and in the worse case, the aircraft is confiscated due to non payment. Therefore, Ghana Airways need to be weary of predatory lending or leases and consider a review of their contracts and other records.

In the airline business, lease agreement can become a huge problem, since each client would like to gain the advantage of the other for profiting. Lease agreements when acquiring newer fleets must never be taken for lease agreement for buildings or other properties.

For Ghana Airways to gain revenue constantly, and to be able to pay its expenses, it should fly on usual basis and on time in order gain the loyalty of its customers, especially cargo services.

The foreign exchange currency market have a considerable effect on airlines, on a daily basis, it accumulates and incur lower exchange rates, meaning affecting everything from jet fuel to maintenance, occasionally, landing fees, as well as pilots go on strike to demand higher pays and retirement benefits.

Most folks don?t know the size of airline operating cost, example, Cash operation Cost, Direct Operation Cost, Indirect Operation Cost. Airplane Related Cost: Cockpit/Cabin Crew, Fuel and Oil, Maintenance, Aircraft Service, Landing Fees, Navigation Fees. Flying Operations, Gross Weight Pay, Mileage Pay, Benefit Pay, Training Pay and some Personnel Expenses, (Hotels/Meals), Pay Roll Taxes, Traffic Related Cost, Traffic Servicing and reservation and Sales, Food, Liability Insurance, System Related Costs, Advertising and Publicity, General and Administrative Taxes. The list is endless. Captain Danso, (Ghana Airways) would agree with me.

The need to take into consideration all the above factors would help insure the survivability of our airliner and from bankruptcy. There is hope for Ghana Airways.

Edward Assan-Mensah
Student Private Pilot. (IFR)
Dayton, Ohio.USA

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