I find it unacceptable to support GIA - Transport Minister

Government has pumped more than US$90 milliom over the past five years into the operations of the Ghana International Airline Limited (GIAL) to ensure the continuous running of the national carrier, the Business and Financial Times reports.

The current government has so far supported the airline to the tune of US$10.5 milliom covering the month of January and July, which it finds unprofitable.

The national airline, which was born after the demise of the erstwhile Ghana Airways has not been profitable since its establishment about five years ago as it does not have an aircraft of its own.

The Airline has since its inception been using Wet leased aircraft for operations and non certification of the Airline leading to continuous operational losses.

The Minister of Transport, Mike Hammah, who took his turn at the weekly meet-the-press said government is forced to dole out US$1.5m monthly to keep the Airline running, which is draining the coffers of the country.

Ghana International is partly owned by US consortium Ghana International Airlines-USA while the government of Ghana controls 70% share in the airline but the Airline is faced with a number of challenges in its operations including inadequate fleet.

Mr. Hammah said since he took office the challenge of keeping the Airline alive is what has been troubling him as he has realized that the fundamentals for setting up the airline were flawed.

“GIA is where I have a problem. How can you set up an airline when you don't have equipments and air crafts to run it and for the past five years government has been paying US$1.5 million every month to keep the airline running and I find it unacceptable to support GIA,” he said.

B&FT checks have revealed that the funds which are advanced to the airline on monthly basis are treated by the airline as loans but there is no formal written agreement between the airline and government to that effect.

As a result, there is no evidence that the loan related cost has been reflected in the GIA accounts.

The loans were contracted to settle the operations of a wet-lease aircraft and meet critical expenditure, rather than to finance any strategic plan or activity.

The airline, since its inception, has been making constant losses due partly to the low start up capital of US$4.9 million.

GIA's net book value as at 31st March 2009 was US$169,409 and comparatively, the annual rent for its head office was US$83,000.

He also noted that cabinet is now reviewing the operations of the GIAL and will soon come out with the way forward for the airline.

However, the minister said there is the need to establish a strong home-base carrier to support the aviation hub as the country waits to start the commercial production of oil next year.

“Despite the problems of GIA, I still believe there is the need to get a home-base airline, especially, with the oil found as it will boosts air traffic in the country,” he added.