GCAA reacts to pull-out threats by domestic carriers

The Ghana Civil Aviation Authority (GCAA) says 'threats' by domestic operators, notably Antrak and Starbow, to relocate their businesses to neighbouring countries are premature as the Authority has already placed an moratorium on registering additional domestic carriers.

The Director-General of the GCAA, Air Commodore Kwame Mamphey (Rtd.) told the B&FT in an interview that the Authority has already frozen the licencing of new domestic airline operators - one of the main concerns of the existing operators.

“We have already said that we are not going to register any more domestic carriers. We have four domestic carriers now, and that is enough for the market.

“Those that are going through the certification process are going to operate regional flights, not domestic flights,” he said.

The GCAA has so far issued licences to five domestic operators, out of which four are currently in operation -including Antrak, Starbow, Africa World Airlines and 540. The fifth operator, CityLink, has suspended its services because of operational challenges.

Antrak and Starbow, the first and second-largest domestic operators respectively, believe that domestic carriers are being crowded out of the regional routes by foreign carriers who exercise the Sixth freedom - a right granted by the GCAA in respect to scheduled international air services, of transporting, via the home-state of the carrier and traffic moving between two other states.

“Foreign carriers like Delta Airlines, Egypt Air, Emirates, Jordan Air, and Air Rwanda carry passengers from Ghana to other West Coast destinations, especially Nigeria. Theses carriers fly these routes at very cheap rates which would be very difficult for local carriers to compete with,” Mr. James Eric Antwi, Chief Executive Officer and Accountable Manager of Starbow told the B&FT in an interview.

Mr. Antwi said: “We have applied for designation to Nigeria since 2011, but have received no response from the authorities. All the domestic carriers are making losses because we are not charging enough to cover our cost of operations. We need the designation to fly to Nigeria in order to sustain our operations and break-even.

“Our inability to fly West Coast, especially Nigeria, has caused us a loss of GHC 21 million over the last year, since our aircraft are a specialised type and consume a lot with regard to fuel. Maintenance and other related costs are also high. As captured in our business plan, we want to fly domestic and regional. We have the equipment and are ready to fly to Nigeria,” he said.

The Chairman of Antrak Group, Alhaji Asuma Banda, earlier this week told the B&FT that the GCAA's ill-advised decision to continue issuing domestic airline licences is hurting industry players at a time existing operators are struggling to break-even due to lack of passengers.

Alhaji Banda also complained about the huge infrastructure deficit in the aviation industry, high cost of aviation fuel and the cost of doing business, and regulatory failure as the key problems hindering domestic airline operations.

“GCAA just issues licences and now everybody is suffering. Those who will go will go. I have invested so much money and I am not getting returns for my money,” Alhaji Banda said.

Starbow and Fly540 have both temporarily halted their operations to Cotonou and Abidjan respectively because of the unfavourable load-factor on those routes. Though almost all of the domestic carriers have designations to other West African countries such as Liberia, Sierra Leone, Ivory Coast, Benin, Dakar, they rate the Ghana-Nigeria route as the most profitable.

According to the operators, while the Ghana-Nigeria route has a load factor of about 150 each way, the other routes in the sub-region have as little as 40 passengers or less per flight.

As a result, the operators see Accra-Lagos as the 'richest' route to ply for any of the domestic operators seeking to go regional.

So far, three domestic operators - Fly540, Antrak and Africa World Airlines (AWA) - have designations to fly to Nigeria. AWA, which acquired its designation just a few weeks ago, plans to commence its Accra-Lagos, Accra-Abuja, Accra- Port Harcourt, and Accra-Kanu flight in the last quarter of this year.

Cmdr Mamphey said: “Antrak has designation to Nigeria, Saudi Arabia, South Africa, Germany and London, but they are not using it [in order to break-even and subsequently make profit],” Cmdr. Mamphey said.

On the issue of granting 6th freedom to foreign carriers that have pushed domestic carriers out of the regional routes started less than a year ago, the GCAA Boss says: “There are only two countries that have the Sixth freedom: Emirates and Delta. Starbow has indeed applied for designation to Nigeria.

“The GCAA and the Ministry of Transport has submitted it on their behalf to the Nigerian Authorities and have followed up on it. We have written to them [Starbow], informing them of the progress of their application. It's now being discussed at the governmental level between the two countries,” Cmdr. Mamphey said.

“There is no restriction on the number of aircraft that comes to Accra from Nigeria and vice- versa.

That is exactly why the likes of Pison are going through designation to operate regional flights. We are open to working with them [domestic] operators to ensure that they succeed,” he added.

According to figures from the Ministry of Transport, domestic airline operators carried 122,000 passengers in 2009, which increased to 543,000 in 2012.

In the first half of this year, nearly 400,000 people used domestic airline services - with most of the passengers carried on the Accra-Kumasi route as they sought to escape the inconvenience of travelling by road between the country's two biggest cities.