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December 10, 2002 | Business & Finance

Big airlines explore west Africa

Financial Times
Big airlines explore west Africa

The unreliability of Ghana Airways, one of the main regional airlines in west Africa, has spawned its share of dark humour among both customers and staff. In response to a passenger's complaint that his flight is leaving very late, a member of the cabin crew simply replies: "As usual." Ground staff in Accra, Ghana's capital, respond to another delay with disarming frankness: "The problem with Ghana Airways is that we don't have enough aircraft and the ones that we do have are too old." This honesty highlights reliability problems that frustrate business travellers in west Africa and offer potential opportunities for airlines able to offer a better service. The problems of carriers in the region have attracted the interest of companies such as Nationwide Airlines of South Africa, which has just signed an agreement with the Ghanaian government aimed at improving the performance of Ghana Airways. "This region is crying out for a carrier," notes one airline executive. "It just doesn't exist at the moment. You don't really have any linking of capitals around west Africa." A combination of apparent growth in demand and deterioration of existing services has encouraged international airlines' interest in the region despite the likely logistical difficulties. The interest is coming both from carriers within the continent and from European airlines that are expanding services to west Africa because they are more profitable than transatlantic routes, says Nick Fadugba, editor of African Aviation, a British-based magazine. "[West Africa is] becoming very attractive both to African airlines and to non-African airlines," he says. "I can see a lot of European airlines in the future looking for local partners in west Africa to consolidate their presence in the market." The problems of west African air travel range from poor safety records to delays and cancellations. In Nigeria, where more than 100 people died after the crash of a domestic EAS Airlines flight in May, passengers have been known to ask the identity of the aircraft flying that day before buying their tickets. Aerocontractors, a Dutch-owned airline that has operated in Nigeria for 43 years, is able to charge about double the rates of its local competitors because of its well maintained aircraft, reliable schedules and a business-class service. Nationwide Airlines says it has identified a "great opportunity" for an airline that can offer a quality service in the region. Vernon Bricknell, managing director, will not discuss the Ghana Airways deal in detail, although he says Nationwide's priority is to "get a modern fleet of aircraft in there and get the passengers' perception of the airline up". He says strong demand exists within Africa among traders in traditional sectors such as commodities and as a result of the gradual opening of economically isolated markets: Nigeria, for example, gave mobile phone operating licences last year to consortia backed by South African and Zimbabwean businesses. South African Airways, which is the continent's largest airline and already flies to Nigeria, Ghana and Ivory Coast, says its strategy is to develop hubs in western and eastern Africa as well as in the south. The airline has just agreed to pay $20m (£12.8m) for 49 per cent of Air Tanzania, the first time it has taken a stake in an airline outside South Africa. SAA plans to begin flights via Senegal to the US in January, reflecting the shortage of flights serving US tourists, oil company employees and other business people. "Our goal is towards a better networked Africa, as we appreciate the difficulties of travelling from one country to another within these western and eastern hubs," SAA says. Other deals reflecting increased foreign interest in the region include the joint venture started last year between Air Sénégal and Morocco's Royal Air Maroc. The new airline serves a large number of Francophone countries, including Guinea, Mali and Benin; analysts say services between west African states are more profitable than domestic travel, where the competition tends to be greater and the number of aircraft in the market larger. Other carriers with pan-regional aspirations, such as Nigeria's Bellview Airlines, have agreements with international carriers to cater for visitors to west Africa wanting to travel onward within the region. The political situation in west Africa creates obvious hazards as well as opportunities for airlines looking to do business there. The region has come to world attention in the past two decades mainly because of poverty and brutal civil wars in countries such as Liberia and Sierra Leone. Conflict and coups have destroyed vital air infrastructure in many countries, although nations such as Senegal, Nigeria and Ghana are praised for their work on improving their airport facilities. A second potential difficulty for airlines expanding into west Africa is the prospect of friction with governments keen to protect perceived national interests. Agreements between state-owned carriers in the region and international airlines have often ended uncomfortably for both sides and disputes over pricing restrictions have sometimes caused problems. For example, in Nigeria economy class fares to Europe are relatively high by world standards, while business class prices are low - a discrepancy interpreted by some observers as a means of ensuring the political elite has access to cheap luxury travel. The calculation for international carriers is whether the drawbacks of operating in west Africa are outweighed by the revenues to be earnt simply by introducing basic improvements. The continued deterioration of the region's national airlines, combined with the problems enveloping the whole aviation industry since last year's terrorist attacks on the US, have created fundamental logistical problems for travellers from both within the region and outside. As Mr Bricknell puts it: "The services that are in place are highly unreliable. You don't know whether they are going to fly or not. That is a big problem."

Business Business & Finance

quot-img-1'Present choices determine future rewards'

By: Agyenco quot-img-1
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