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05.07.2002 Feature Article

Deregulate Ghana's Aviation System For Development

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From Yamoussoukro to Quebec thousands of dollars spent on these and other high level meetings and conferences on Aviation Deregulation, yet Ghana’s aviation arena remains stagnant and tightly controlled. Two decades after Airline deregulation its unfortunate Ghanaians remain stack with Ghana Airways as the only indigenous airline. Air travelers in most parts of the world have various options of air transport as a result of global deregulation and the emergence of several indigenous airlines. For Ghanaians that remains nothing but a dream. The dominant position of Ghana Airways can be equated to Pan American Airlines and British Caledonia in the late 60’s. These airlines were beneficiaries of the chosen instrument policy, through which national pride and prestige was displayed. However deregulation gave rise to several other well-established airlines such as Northwest, United Airlines, U.S. Air, Virgin Atlantic, and British Airways. All these Airlines continue to display national pride while providing better and affordable air travel to its citizens. The end of the Second World War with an increase reliance on air transportation, several nations formed airlines as a means of projecting their nations, as well offer subsidized travel to its citizens. Ghana also established Ghana Airways soon after Independence, to provide affordable air travel to Ghanaians while projecting national pride. Ghana Airways like all other national airlines has attracted overwhelming national loyalty and pride. As a normal phenomenon travelers prefer to travel on airlines belonging to their nation over any other airline even if offered lower prices or better services by a foreign competitor. Ghana Airways has also been a beneficiary of this great loyalty. Changes in world dynamics and an ever increase reliance on Air transportation brought about needs for changes in the aviation arena as a means of facilitating global growth and development. The U.S. set the pace by deregulating its airline industry in 1978, through the Airline Deregulation Act. While the act was targeted primarily to liberalize American Aviation, The Deregulation policy statement also addressed international air transport. The first provision was the promotion of adequate, economical, and efficient service by air carriers at reasonable charges, without unjust discrimination, undue preference or advantages, or unfair destructive competitive practices. The other is the provision for encouraging competition to the extent necessary to insure sound development of air transportation systems properly adapted to the needs of foreign and domestic commerce. This marked the beginning of change in aviation all over the world. Although Europe reluctantly embraced deregulation at its onset, it followed the United States, and deregulated its aviation industry to facilitate growth and development. Deregulation gradually spread across the globe with many African nations trilling the movement for liberalization of the airline industry. The year 1988 was a great milestone for several African nations. Thanks to the International Civil aviation Organization. The Yamoussoukro conference held in Cote d Ivory was to renew Aeronautical policy for Africa. The conference advocated an open skies agreement for Africa, and liberalizing air transport in the continent over the next 8 years. The Yamoussoukro conference and its declaration popularly known as the Yamoussoukro Declaration has been hailed as a momentous step in defining the future of air transportation in the region. Several African nations have liberalized their aviation systems after Yamoussoukro. It is unfortunate Ghana still lags far behind fully implementing provisions of this declaration and all other agreements for liberalization and open skies. Until the early 90’s African nations strongly protected their aerospace industries through national and regional policy such as the notorious Yaounde Treaty of 1961, which granted monopoly rights to Air Afrique within the region. The Yaounde Treaty was adopted based on the notion that each country had a small market and the airline had better prospects of achieving the scale and network it needed to be financially viable. Ghana has also operated a tightly controlled aviation industry to protect Ghana airways from competition and preserving its customer base. Foreign air operations in and out of the country has been based on aviation principals of reciprocating landing rights given Ghana airways by other nations. While Ghanaian policy makers and bureaucrats fail to open the nations aviation industry to competition as protectionist measure for Ghana Airways. The nation continues to loss several million dollars each year it would otherwise have gained from a liberalized aviation industry. Ghana remains one of the few African Countries yet to fully deregulate its aviation industry. Ghana has been represented in almost all regional and global aviation meetings and conferences on open skies, deregulation, and joint ventures however there remains a wide gap between rhetoric and action. Although Ghanaian citizens remain at the losing end of Ghana’s liberalization firewall, Ghana Airways has also not benefited from operating within a tightly controlled aviation environment either. Had there been other operators the airline would certainly have benefited from strategic alliances in flight operation, maintenance, ground handling, ticketing, reservations, and achieved the needed economies of scale for profitability and growth. Currently Ghana air has no option than pay huge charges and fees for maintenance and other services overseas. A small aerospace industry as a result of protectionist policies has not attracted investment for Aerospace training. Ghana consistently relays on training abroad, or alternatively recruit highly paid expatriates to fill aerospace slots. We should not expect our airline to breakeven with such high overhead costs. The result of years of protectionism has caused Ghana Airway to be complacent, and far removed from tenets of modern day aviation, and business focused at customer satisfaction and profitability. There is no way Modern air business can thrive like that. Had Ghana airways operated in a free market environment the airline would certainly have evolved to meet challenges of today’s market place and aviation, or alternatively absorbed by another indigenous airline, to the overall benefit of citizens, travelers and the nation. Having already missed great benefits as a result of operating in a tightly controlled arena. Ghana stands to lose more if drastic measures are not implemented to liberalize and encourage private investment in Ghana’s aerospace industry. Boeings huge investment, projected to earn the nation over 40 million dollars will fall by the roadside. Without deregulating the nations aerospace industry, Boeing cannot meet its targets and may reconsider its investment or relocate to other countries. While policy makers doodle with Boeing’s proposals other West African nations are strongly lobbying Boeing to bring the investment to their nation. The nation has already lost lots of private aerospace investment like Fun air and Afrinat International airlines. Afrinat International Airline with a 95% Ghanaian stake hold in the U.S. could not register operations in Ghana and had to choice Gambia as its home base. What a waste! Lets hope Sobel and others are able to break their firewall. Liberalizing Ghana’s aerospace sector will help the nation milk part of the global cake that has eluded it all these years. The ever-growing importance of Air Transportation cannot be over emphasized. In light of the aviation’s tremendous impact, air travel statistics has become a leading indicator of general economic trend. According to a study by the world travel and tourism council, travel and tourism is the worlds largest industry directly and indirectly driving more than 10% of global jobs GDP and investment. To further stress the importance of aviation and the need for liberalization, former U.S. sec of Transportation Rodney E. Slater impressed on African Aviation Directors at a meeting in Montreal, Canada in 1997 to deregulate their airline industries, emphasizing aviation is vital to the ability of nations to trade, invest, develop, prosper and to be an active part of the growing global economy. According to him “ if you can’t trade you can’t get there”. Deregulating Ghana’s aviation industry would boasts Ghana’s social economic development through the creation of new jobs, generate revenue through taxes and royalties, and stimulate trade and tourism. Deregulating the industry will introduce competition and give rise to lower airfares and improved services to customers. Lower airfares will stimulate more travel. More travel, more business. More business will lead to wealth and development. Ghana’s aerospace policy makers should take lessons from pace setters like Morocco, Algeria, Tunisia, South Africa, Gambia and Kenya. These countries have witnessed tremendous growth in their aerospace industry since liberalizing their aerospace industry. Within years of liberalizing its airline industry, Algeria witnessed the emergence of many new and well established carriers such as Khalifa Airways, Antinea Airlines, Sahara Airlines, Tassili Airlines, and Eco Air. Ghana Civil Aviation Authority having made very laudable moves at privatizing airports, it is imperative air carrier operations are first and foremost liberalized to attain all objectives of its airport privatization program. Enhancing air transport has enormous consequences for customers and the nation at large. Clearly the nations economy will be significantly enhanced by removing government imposed restrictions or hindered by failure to do so. ASIWOME DZAKUMA FAA Licensed Commercial pilot

Asiwome O. Dzakuma
Asiwome O. Dzakuma, © 2002

The author has 5 publications published on Modern Ghana. Column Page: AsiwomeODzakuma

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