12.02.2002 Feature Article

Suggestions for Making Ghana Airways Better

Suggestions for Making Ghana Airways Better
LISTEN FEB 12, 2002

That the national airline is on the verge of collapse is no surprise. Every Ghanaian from Axim to Zabzugu knew it was just a matter of time. The question being asked these days is what are we or more precisely, the government, going to do now that we are confronted with the event. It is obvious from the statements emanating from the management of Ghana Airways (GH) that they are expecting a government bailout. The government on the other hand, has indicated its willingness to inject $120m into the airline should a new management be put in place at GH. How this is suppose to happen has not be spelt out by the government, which owns GH, and one is left wondering if it just lacks the political will to institute the changes it sees as necessary for the financial survival of GH. In addition to serving the practical purpose of providing air transportation to and from Ghana, GH serves as our ambassador to the outside world; projecting the Ghanaian identity on the international scene. For a long time, it served this dual purpose quite well and was a source of pride for most of us. Unfortunately, in the past decade or two, it has been a source of shame and embarrassment. GH has come to embody all that is wrong with corporate Ghana – corruption, ineptitude, mismanagement, worker apathy and greed. While an existence of these practices and traits in any company will condemn it to eventual collapse, GH’s imminent collapse is a result of something more insidious. This is the perception amongst GH’s staff in general and its management in particular, that because as a company, it embodies our national identity and sense of independence, under no circumstance would a government muster enough political courage to let it collapse. This was amply reflected in the recently published GH Board/Management report. For so long as this attitude is allowed to fester thorough the actions or inactions of government, GH will never be a profitable enterprise; there is no incentive for the management to take the needed steps to put the company on a sound financial footing. So while the call by the government for a new management is a step in the right direction, I believe it does not go far enough. The government should use this opportunity to send a strong and unambiguous message to the staff of GH and all government companies for that matter - their jobs depend on they engaging in practices to keep their establishments profitable, by leaving GH to its fate. However, I think the GH management is right on the mark when it says the government will not take such a stand so I present a few suggestions that can make GH a better airline. Although the management of GH in its published report alluded to a number of business opportunities that the airline could pursue, it did not offer any clear business vision for the future. I believe that what will make our national airline profitable is a drastic change in the airline’s business strategy and focus. Based on the fact that GH’s presence on the international market is negligible (and that is the patriot in me talking) and a belief that the only way to improve this is to first, have a dominate presence in the regional (domestic and continental) market, I suggest that the airline abandon its inter-continental routes and became a regional carrier and hopefully, turn Ghana into a major transit point for travel to and from West, Central and East Africa. Other than the dent in our collective national pride, such a decision would have virtually no impact on the Ghanaian international traveller. A cursorily examination of the airline industry would lead anyone to the conclusion that there is no compelling reason for GH to be operating inter-continental routes. Currently, foreign airlines account for the overwhelming majority of the international passenger traffic. Most Ghanaians do not depend on the GH for their international flights. In fact, most Ghanaians will not fly GH if they had the choice. Of course, this suggestion is predicated on the assumption that Ghana would continue to be well served by the foreign airlines currently operating in the country. However, if the recent events involving SwissAir and the general turmoil in the airline industry are any indication of what lies ahead, then it is possible this would not be the case forever. Though it is possible that Ghana may cease to be a destination of these airlines in the future, it is inconceivable that they would stop flying to Africa altogether. Ironically, this worst-case scenario might even be better for GH. A reconstituted GH with strong regional services will then become the dominant and probably, only player on the Ghanaian market; serving as the feeder airline for the airlines operating international flights from other African countries. Once upon a time, there were domestic GH flights. It is time these flights were reintroduced. In a country where everything is concentrated in Accra, Ghanaians have no choice but to travel to Accra for a large array of services. With a road network that turn one-hour journeys into three-hour trips and the frequency of road accidents, I am sure a lot of people would be willing to fly if GH operated domestic flights. A natural constituency of costumers would be its own passengers on its regional flights and passengers on international trips. Who would not like to fly directly from Tamale to New York? With a total asset of $50M and a debt of $150M and growing, it is obvious that GH needs a cash infusion and a reduction in cost. A major portion of any cash infusion would have to be used to improve its fleet. Why the management of the airline seems to think it can run a profitable airline with only 5 (including those on perpetual maintenance) is beyond me. The chronic unreliability of GH’s schedules is a direct consequence of its fleet size. The beauty of operating a regional airline is that you do not need the big long haul aircraft such as Airbus A340 and Boeing 747, which are expensive to lease or purchase. There exist a wide range of competitively priced regional aircraft with passenger capacity ranging from as low as 10 to as high as the low one hundreds. Logically, regardless of the amount of money the government ends up committing to GH this time, it will be easier to acquire a larger fleet of smaller aircraft. Whatever the management of GH and the government decide to do, it would have to include a cosmetic but important change: a corporate makeover. I am not talking about the obvious, that is the way GH conducts business and treats its passengers but rather its colours and logo. Simply put, our logo is “too 20th Century”, to use North America teenage lingo. We need something slicker and ‘hi-tech’. Our colours on the other hand, are too African. Too African in the sense that too many African countries use Red, Gold and Green and using those colours does not make us stand out. We should think of something that would uniquely identify our aircraft as Ghanaian; for example, painting them in kente patterns. As I said earlier, this is just cosmetic but British Airways and AirCanada thought it necessary to have a makeover a few years ago. For GA, it is even more important since it would signal a break with the past. Of course, this should be accompanied by a change in the attitude of the people who deal with the travelling public. Last but not least, GH should get out of the business of ferrying African deportees from European capitals. Apart from it being morally reprehensible, no airline would attract passengers by regularly having deported prostitutes on its flights. If it could, the national airlines of these countries would not have let GH have the business. GH has the potential to be a profitable business venture but for it to realise this potential, it needs to develop a culture of self-reliance and corporate responsibility. So while the government is inclined to assist this time, it is absolutely necessary that it not only get the new management it has requested but also a clear long time business plan that promises to put the airline back on the road to financial sustainability. The plan outlined above will be a good start. Dr. Yaw Asiedu Operational Research Analyst, Ottawa, ON, Canada

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