General News of Sunday, 4 January 2015
The President of IMANI Ghana, Franklin Cudjoe has advised government to abort its decision to invest in a national airline until the economy is sound.
He is of the view that with Ghana’s current economic state, “now is not the time” even if a national airline was a prudent investment.
Mr. Cudjoe argued that, for a nation in talks with the International Monetary Fund (IMF) for an economic bailout to consider reviving its national airline following two failed attempts “points to a lack of priority.”
He thus suggested that the economy “must be put right before talks concerning a new national airline are initiated.”
The government is in the process of acquiring a national airline through a Public Private Partnership (PPP).
Despite strong reservations being expressed by sections of the public and some industry players, government is adamant, and defends its decision to invest in such a venture.
The Deputy Minister of Transport, Joyce Bawa Mogtari, in an earlier interview with Citi News, explained that “this route is a very, very viable one, for now we have 41 national carriers plying this route, why can we not put our national carrier back in the sky to compete with the existing businesses?”
This will be the nation’s third attempt at establishing a national airline; the previous two collapsed due to mismanagement, inefficiency and huge debts.
In a post on his Facebook page on Sunday, the IMANI boss pointed out that a number of national carriers such as Swiss Air and Olympia Air have all folded up due to the stiff competition with private airlines, therefore, it will be unwise for Ghana to go into such business.
According to him, “the numbers in the airline industry makes it seem as though the growth of the market is profitable for airlines” which is greatly influencing the government’s decision to invest in the industry.”
This perception, Franklin Cudjoe said, “is not necessarily the case.”
“In the past year, Virgin Atlantic and Air Namibia have pulled out of Ghana due to unsustainable operating costs. The dramatic depreciation of the cedi has created hard times for domestic airlines as well, whose operating costs are in dollars although ticket fares are quoted in cedis.”
He continued, “as of May this year, fly540 ceased operations indefinitely, and other market players such as Antrak and Starbow are making losses of about Ghc600, 000 per month. Although consumer demand for air travel in Ghana continues to grow, the airline industry does not necessarily benefit in the form of profits.”
He, therefore, pointed out that if government’s “motivation for resurrecting the national airline is to increase revenue; it may very well yield the opposite.”
He admitted that a majority of the scandals that rocked Ghana Airways and Ghana International Airways occurred under different governments, and there is the possibility that things may be different under this government.
But the IMANI boss argued that it will be “unduly optimistic to think that things will be better if we rebuild a national airline that is partially state owned.”
He stressed that there are bigger issues to be tackled, including roads, fuel pricing and supply, and the supply of electricity and water.
“Is a new Ghana Airways a prudent investment? The answer is no, a better economic climate might not change that answer either,” he concluded.