GOIL, GLICO, Teachers Fund in race for new flag-carrier

Business News of Saturday, 10 November 2018

Source: thebftonline.com

2018-11-10

Government hopes to revive the home-based carrier to serve as a source of revenue for GACL

Ghana Oil Company Limited (GOIL), Ghana Life Insurance company (GLICO) and Teachers Fund are in a race to be chosen as strategic partners for the establishment of a new home-based carrier.

The shortlist of 10 entities also includes Colt Aviation, M-Tech, Air Mauritius, Ethiopian, Ge Capital Aviation, Egypt Airlines, AWA, and Air Ghana.

Government is keen on establishing a new flag-carrier as it seeks to turn the country into an aviation hub in a sub-region where air connectivity is still underdeveloped.

Given the recent investment in on-ground infrastructure, a home-based carrier is expected to help maximise these facilities and generate enough revenue to pay back loans secured by the Ghana Airports Company Limited (GACL) on the back of its own balance sheet.

Teachers Fund’s interest in the new airline comes as no surprise, given their interest in Aviance – a ground handling company headquartered in the Kotoka International Airport enclave.

GOIL, on the other hand, is one of the few state-owned enterprises with a very strong balance sheet capable of investing in the capital-intensive aviation sector.

Insurance giant, GLICO, is also very sound financially and is keen on undertaking this new project.

The interest of the three entities and that of other partially-Ghanaian owned entities have opened the possibility of looking inward to source a strategic partner for the new flag-carrier.

Structure of new airline

Aviation Minister Joseph Adda has said that government will not take up more than 10 percent in the yet-to-be-established new national air carrier – emphasising that government is being careful not to repeat mistakes of the past.

“What we are looking at is not more than 10 percent shares [in the new airline], and that is the extent to which government will be involved. We will have one or two representatives on the board, but neither government nor the [Aviation] minister will interfere in operations of the new company in terms of policy, strategy and operations,” he said.

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