FabAfriq Magazine

Ethiopian Airlines Working To Help Launch Ghanaian Airlines Carrier

Background to now defunct Ghanaian airline companies

 

Studies from OECD show that nearly 13% of the world’s population live in Africa, but unfortunately they make up less than 3% of the world’s airline passengers. Africa’s airlines, Ghana Airways included, have long been characterized by very poor management, inefficient policies, very high taxes and unbelievably high operation costs. The Centre for Aviation summarizes the situation succinctly as one of “impotent government strategies and ongoing protectionism.”

The collapse of Ghana airways in 2004 is a vivid example where the airline crashed as a result of rampant overstaffing and over USD $160 million debt. The government owned 60% of the airline which was mired in debt and dysfunction.

The new Ghana International Airways was born out of this rubble. The Ghanaian government now took a 70% stake in the airline and brought in Ralph Atkin, founder of Skywest Airlines, to run the carrier but even he could not save the airline from debt and protracted legal disputes between its shareholders. Ghana International Airways completely ceased operating in March 2010.

But Ghana’s government says it has learned from past mistakes and the country is now ready for a new national carrier.

New beginnings

Following the demise of Ghana Airways and Ghana International Airlines the West African economic powerhouse does not have a national airline. In 2016 the government of Ghana invited international airlines who are interested in forging a strategic partnership to establish a home based national carrier in Accra. Among those who applied for this, Ethiopian was chosenandEthiopian and the Ghanaian government signed a Memorandum of Understanding (MOU) last December.

The proposed airline will be a home based airline that would be established by Ethiopian Airlines in collaboration with the government of Ghana and the private sector. The government of Ghana and the private sector will have a minimum of 51 percent stake in the proposed airline while Ethiopian will hold up to 49 percent interest in the new national airline.

 

Ethiopian Airlines Group CEO Tewolde Gebremriam told The Reporter that the final agreement was signed with the government of Ghana last week. “It is still at an initial stage and we don’t have any timeline yet,” Tewolde said.

A source close to the project told The Reporter that the start-up airline would be operational at the end of 2019 or early 2020. “The government of Ghana will have a ten percent stake while private investors from Ghana will have a minimum of 41 percent stake in the Joint Venture Company. Investment firms from other West African countries may invest in the new venture. Ethiopian and the government of Ghana will together look for potential investors,” he said.


The proposed national airline will operate domestic, regional and international flights. Tewolde told The Reporter that his management is happy that the Ghanaian Government selected Ethiopian as its strategic partner. “We are committed to work together with the Ghanaian government to re-launch the national carrier of Ghana,” he said.

 

Ethiopian airline’s rapid expansion throughout Africa

The new airlines which is not yet named, is sure to be a great success looking at the fact that the government had the wisdom to choose Ethiopian airlines as their strategic partner from whom they can benefit tons of experience. Ethiopian airlines is one of the world’s leading airlines which has a rich experience spanning over a period of over 70 years. They made a profit of USD$245 million profit with a fleet of 112 aircrafts to five continents and 22 domestic destinations. It has a formidable and growing reputation. This coupled to the fact that there is major ongoing repairs and construction in Ghana’s airports, and that Ghana has been smart enough to allow majority shares to Ethiopian airlines to be able to do what it does best-that is- running an airline, it is going to be practically impossible for the most recent upgrade in the Ghanaian aviation industry to fail. The startup airline is set to go operational in late 2019 or early 2020.



 


 

Photo Gallery

FabAfriq Facebook Activity