The continuous tug-of-war between authorities and airlines over high airfares is yet to end.
While the Minister of Transport, the Ghana Civil Aviation Authority (GCAA), and Parliament have called for a reduction in airfares charged by foreign airline operators, airlines have blamed the high airfares on high taxes.
In a response to calls from authorities to reduce airfares, Mr. Ed Winter — a member of the management team of Stelios Haji-Ioannou, the founder of discount carrier EasyJet Plc — said high aviation taxes are a barrier to operating in West Africa and are responsible for the high airfares in the country.
The company, which is looking to launch its airline in the country, plans to meet with authorities to discuss the need to lower tariffs.
“Authorities should review the level of taxes being charged. The level of taxes does not encourage people to travel,” British Airways’ Country Commercial Manager, Mr. James Wooldridge, told the B&FT.
Director-General of the GCAA, Air Commodore Kwame Mamphey, explained to the B&FT in an interview that there “has been no increase in landing fees in Accra for the past five years. Taxes on aviation fuel, which make up 30% of the overhead costs of airlines, are what should be reviewed to give them some relief.”
Any attempt to review taxes on aviation fuel must come from Parliament, he said.
In the 2012 budget, government expects to increase tax revenue from the sector from 16.5 percent of GDP in 2011 to 17.3 per cent in 2012.
High airfares have recently been an issue in Ghana’s West African neighbour Nigeria, too. The federal government has given all foreign airlines operating in the country a 30-day ultimatum to reduce airfares or risk being banned from operating in the country.
Meanwhile, Accra gets busier by the day as an aviation destination and hub in the sub-region.
Air Cdre Mamphey said his outfit is in discussions with cargo airlines to handle the increasing cargo arriving in the country. “Accra has become an aviation hub in the sub-region. There is a lot more connectivity into Accra. There is a large volume of passengers connecting flights to Europe and other places through Accra. As people travel, the increase in traffic will reflect on cargo. That is an area we are looking at closely.”
The GCAA and the Ghana Airport Company have in recent years collaborated with the Civil Aviation Authority of Singapore (CAAS) to train human resources for the country’s aviation sector. This training has been driven in Ghana by the Ghana Civil Aviation Training Academy (GATA).
Such international exposure for aviation personnel, coupled with efforts to boost aviation infrastructure is intended to increase confidence in Ghana’s market, and reduce risks and lease- costs that will ultimately translate into lower fares.
The industry has continued its steady growth in the last two years and there is a strong foreign airline presence in the country. Around 30 international airlines operate from Accra presently, with Royal Jordanian Airlines and Iberia expected to join by June.
Iberia Airlines, in collaboration with British Airways, is set to commence a direct flight from Madrid to Accra on July 17, 2012. It will start with two flights a week between the two cities.
By Dominick Andoh
