Abort investment in Airlines until Economy is sound,Imani Boss


wpid-images_7.jpegThe President of IMANI Ghana, Franklin Cudjoe
has advised government to abort its decision
to invest in a national airline until the
economy is sound.
He was of the view that the current state of
the Ghanaian economy indicates that even if a
national airline were a prudent investment,
“now is not the time.”
Mr. Cudjoe argued that for a nation which is
in talks with the International Monetary Fund
(IMF) for an economic bailout to consider
reviving its national airline following two
failed attempts “points to a lack of priority.”
He thus suggested that the economy “must be
put right before talks concerning a new
national airline are initiated.”
Government has begun processes to acquire a
national airline through a Public Private
Partnership (PPP).
Despite the strong reservations being
expressed by sections of the public and some
industry players, the government has defended
its decision to invest in a national airline.
The Deputy Minister of Transport, Joyce Bawa
Mogtari in an earlier interview with Citi News
explained that “this route is a very, very viable
one , for now we have 41 national carriers
plying this route, why can we not put our
national carrier back in the sky to compete
with the existing businesses?”
This will be nation’s third attempt at
establishing a national airline since the
previous two collapsed due to
mismanagement, inefficiency and huge debts.
In a post on his Facebook page on Sunday,
the IMANI boss pointed out that a number of
national carriers such as Swiss air and
Olympia air have all folded up due to the stiff
competition with private airlines, therefore, it
will be unwise for Ghana to venture into the
business.
Franklin Cudjoe
According to him, “the numbers in the airline
industry makes it seem as though the growth
of the market is profitable for airlines” which is
greatly influencing the government’s decision
to venture into the industry.”
This perception, Franklin Cudjoe said “is not
necessarily the case.”
“In the past year, Virgin Atlantic and Air
Namibia have pulled out of Ghana due to
unsustainable operating costs. The dramatic
depreciation of the cedi has created hard
times for domestic airlines as well whose
operating costs are in dollars although ticket
fares are quoted in cedis.”
He continued saying, “as of May this year,
fly540 ceased operations indefinitely and other
market players such as Antrak and Starbow
are making losses of about GHC 600,000 per
month. Although consumer demand for air
travel in Ghana continues to grow, the airline
industry does not necessarily benefit in the
form of profits.”
He therefore pointed out that if government’s
“motivation for resurrecting the national
airline is to increase revenue; it may very well
yield the opposite.”
He admitted that the majority of the scandals
which rocked Ghana Airways and Ghana
International Airways occurred under different
governments and there is the possibility that
things may be different under this government.
wpid-images_5.jpeg
But the IMANI boss argued that it will be
“unduly optimistic to think that things will be
better if we rebuild a national airline that is
partially state owned.”
He stressed that there are bigger issues to be
tackled, including roads, fuel pricing and
supply and the supply of electricity and water.
“Is a new Ghana Airways a prudent
investment? The answer is no, a better
economic climate might not change that
answer either,” he added.
By: Efua Idan Osam/citifmonline.com/Ghana

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s