Business News of Monday, 8 September 2014

Source: Daily Guide

Government pushes for new airline

The Ministry of Transport has defended government’s decision to establish a new national airline.

Some civil society groups and domestic airline operators have raised concerns about the establishment of the national airline. According to them, the country’s current economic situation would not support the move.

But government, with the support of the World Bank, has contracted PriceWaterhouseCoopers to select a strategic investor for the initiative. Some aviation experts have since advised government against the move.

In an interview with the press in Accra last week, Deputy Transport Minister, Joyce Bawa Mogtari, said, “Presently, we actually have about 41 airlines flying this country with some being domestic while others are international. Passenger throughput has been on the ascendancy over the last few years. I believe that a national carrier has a place to survive and compete. And that if it is properly established and well structured, there’s no reason why we cannot sustain it.”

Chairman of Antrak Group, Alhaji Asuma Banda, recently told journalists in Accra that he would take legal action against the State if government goes ahead to establish a new national airline.

According to him, a state-run airline was a conduit to waste public funds and that he would not sit down for state resources to be spent on unprofitable ventures. “If the government goes ahead to establish a new airline, I will challenge them in court. We have no money to throw away. It won’t work.”

A former rector of the Ghana Institute of Management and Public Administration (GIMPA), Professor Stephen Adei, also opposed the intended move by government, saying state officials could not be trusted to be prudent with managing a national carrier.

Prof. Adei advised government to convince the various domestic airlines to “fly the national flag” instead of pursuing a new national carrier.

“If we venture into another airline, our money will be wasted. They should speak to these smaller ones to fly our flag. In this present condition, we can’t afford to manage a national airline.

“Our political appointees will seat in the business class and will not pay. I appeal to President Mahama to forgo that idea, the wastage is too much in the system,” he added.

Government is seeking to own at least 51 percent shares of the proposed new national airline.