Government has directed both domestic and foreign carriers operating servicing at the Kotoka International Airport (KIA) to take immediate action to reduce their airfares to reflect the 20 percent reduction in the price of aviation fuel announced on Friday.

Government in consultation with the Ministry of Transport and the Ghana Civil Aviation Authority -- the industry regulator -- reviewed the price of aviation fuel downward in order to bring down the relatively high airfares and position the country as an aviation hub within the sub-region.

The Director-General of the Ghana Civil Aviation Authority (GCAA) Air Commodore Kwame Mamphey (Rtd.), reacting to the reduction in the price of aviation fuel, said “this will not only help reduce airfare tariffs but also attract more airlines to use Kotoka International Airport as their preferred destination.

“This gesture by Government will open the floodgates for airlines to use KIA, hence our dream of making KIA the hub is on course with this intervention,” he said.

Air Commodore Mamphey (rtd.) was speaking at a stakeholder meeting with airlines operating into the KIA.

It is estimated that on average about 64 percent of the price of air tickets that international passengers pay goes into taxes, fees and surcharges -- while in Nigeria the tax component of an air ticket is about 35 percent.

Carrier-imposed surcharges in the country also remain relatively high. It currently ranges between US$400 to US$600 on the Accra-London route.

For instance, for an economy class ticket from Accra to London that costs about US$950, the base fare is US$330 while taxes, fees and carrier imposed charges make up US$620 of the total ticket price.

There have been calls in recent times by domestic, regional and international operators for a review of the tax regime governing the aviation industry -- particularly fuel prices and airport taxes -- in order to bring down airfares.

“It [fuel prices and taxes] has always been the complaint of all the airlines. If you take the base fares of the airlines, you realise that the fares are low but it’s the taxes that make it expensive. As much as possible, the Airport Authority and the GCAA have tried to negotiate with the airlines. In the same vein, we have tried to point out to them that it’s not about the fare but it’s about the taxes,” Mr. Worlanyo Afadzinu, Country Manager, ASKY Airlines told the B&FT.

Reacting to the relatively high carrier imposed surcharges in the country, Mr. Afadzinu said: “We charge a lot because of the cost of operation.”

Government, in its 2013 budget, allocated 100 percent of all airport taxes to the Ghana Airports Company Limited (GACL) to enable it maintain and develop existing aviation infrastructure in the country.

Under the past arrangement for the use of airport taxes -- which had been in place since 2001 -- 60 percent of all airport taxes went directly to Government to support the national budget while 40 percent was left for the supervising entity, the Ghana Airports Company Limited (GACL).

Passengers travelling from the Kotoka International Airport (KIA) on economy, business class tickets, and regional airlines are charged US$100, US$150 and US$50 respectively as Passenger Service Charges.

About GH¢61million and GH¢78million were realised in airport taxes in 2010 and 2011 respectively. Out of the amount, GH¢37million and GH¢47million respectively went to support the national budget; a situation that has over the period deprived the Ghana Airport Company Limited of the resources needed to undertake major maintenance and rehabilitation works.