Business News of Wednesday, 5 December 2018
Ethiopian Airlines has been selected as the strategic partner for the proposed new home-based carrier, AviationGhana can exclusively reveal.
At exactly 6pm Ethiopian Time on Tuesday, December 4, 2018 a Memorandum of Understanding (MoU) was signed at ET’s headquarters to signify government’s undertaking to work with ET in establishing a new home-based flag carrier.
Aviation Minister, Joseph Kofi Adda, signed on behalf of the Government of Ghana while Tewolde GebreMariam, Ethiopia’s Chief Executive Officer signed the MoU on behalf of the airline.
A final agreement is expected to be signed before Christmas. The airline is also expected to start flying early next year.
The desire to establish a new home-based carrier after the collapse of Ghana Airways—a fully state-owned entity—and the subsequent collapse of Ghana International Airlines, established with private sector participation after the collapse of Ghana Airways, stems from growth in the sector experienced on the continent and the industry’s future potential.
Huge investments in on-ground infrastructure, such as expansion of the Arrival Hall of Terminal 2 and construction of Terminal 3 at the Kotoka International Airport (KIA), construction of a new terminal building at the Kumasi Airport, expansion of the Tamale Airport, reconstruction of the Wa airport and construction of a new airport in the Volta regional capital Ho, all require that a home-based carrier, which will focus on operating domestic and regional routes before taking on the rest of the world is established.
Tewolde GebreMariam, Ethiopia’s Chief Executive Officer, told AviationGhana on the sidelines of the Routes Africa Conference held in Accra in June that: “Yes, we have submitted our proposal and held discussions. [If we are chosen] we will operate domestic flights in addition to regional flights.”
Analysts believe that the commitment by Ethiopian to operate domestic flights was very instrumental in their selection as strategic partners. This is expected help the country maximize the huge investments made in airport infrastructure.
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.