Ghana's domestic air carriers have come under a heightened rivalry with discounted fares among the key players, raising fears of a challenging future for the industry. Suleiman Mustapha reports.
A looming price war between Ghana’s domestic airline operators has raised fears it will spell doom for struggling local airliners, as the sector gets clogged with new entrants.
At the moment, CityLink, which is among the maiden domestic carriers, has for the past few months not operated and industry watchers are worried about the airline’s inability to stake a claim in the local aviation industry.
The increase in the number of players has resulted in drastic reduction of air fares to as low as GH˘50 currently by one of them, Antrak Air.
The Chief Executive Officer of Starbow, Mr Brock Frieson, has also hinted that fares would continue to go down but emphasises it would largely depend on their cost of operations.
“We’re monitoring and we’ll ensure that we’re always competitive but that doesn’t necessarily mean price wars.” The airline is offering passengers a reduced fare of GH˘99 on the Accra-Kumasi route. Passengers also get to enjoy a reduced fare of GH˘49 one-way to Kumasi on the airline's mid-day flight.
Travellers to Takoradi will also enjoy a reduced fare of GH˘99, while Accra to Tamale one-way is now GH˘149.
As the competition heightens between Antrak Air, Fly 540 and Starbow, the industry has just recorded a new entrant, a Chinese-backed Africa World Airline (AWA) to fly domestic and regional routes.
At the time Starbow started flying, the two established domestic airlines, Antrak Air and CityLink charged considerably more. For instance, City-Link was charging GH˘139 between Accra and Kumasi, and between Accra and Takoradi one-way, and GH˘250 between Accra and Tamale.
Instructively, since Starbow introduced its own domestic flights at considerably lower fares, the two airlines have slashed theirs to about the same as what Starbow charges. Late last year, a fourth domestic airline, Fly 540, also started operations, pegging its fares at about the same prices as the others.
This has shot up domestic air travel. For instance, from November to December 2011 patronage of domestic flights in Ghana shot up to 12,000 passengers and it is on record that January witnessed high support.
Apart from the telecommunications and banking sector, where competition has heightened, the domestic aviation industry is also witnessing a keen rivalry, where discounted air fares are benefitting customers.
The Managing Director of the Ghana Airports Company Limited, Mrs Doreen Owusu Fianko, believes that the Accra-Kumasi route was making an average of 4,000 passengers but presently, it had 12 flights a day.
“Tamale, as well, used to have only one flight a day but now there are two flights to Tamale every day,” she noted. But players in the industry discount air fares in order to beat competition and stay afloat, there are fears that opening the floodgates for more entrants into the domestic airline industry will stifle the industry.
The Chairman of Antrak Group of Companies, Alhaji Asuma Banda, has sharply criticised what he describes as the over-liberalisation of the aviation industry to the disadvantage of indigenous operators.
He said the policy had allowed some foreign firms to adopt unfair tactics to deny local operators such as Antrak Air, service contracts.
Even though other countries in West Africa were signatories to the same agreements that promoted liberalisation of airspace among countries, they had not over-liberalised their airspaces as Ghana had, he said.
Alhaji Banda stated that Ghana needed a successful local airline to regain the US Federal Aviation Authority (FAA) Category 1 status, adding that AntrakAir would be the airline to help achieve this status.
“Ghana needs a domestic airline that qualifies to get Category One by the end of this year; Antrak is the airline to restore Category One for the country,” Alhaji Banda said.
He appealed to the Ghana Civil Aviation Authority (GCAA) to help local airlines by taking a look at fuel prices, taxes and other fees with a view to reducing the prices for domestic carriers so that they could in turn make their flights affordable for passengers, saying “we will love to reduce the fares but we can’t.”
But the Director-General of the GCAA, Air Commodore Kwame Mamphey, said while the GCAA shared in the concerns of Alhaji Banda, the country risked creating a huge vacuum in the aviation industry if it relied on the local operators alone to deal with the huge demand for domestic airline services.
“We do not intend to make the domestic airline operators worse off, but we are advising them on how to make their operations more competitive to meet the demands locally and to explore new routes on the West Coast,” he said.
The GCAA boss disclosed that more airlines had been licensed to operate, saying “they are coming soon.” The airlines include Pison, Eagle Atlantic, and Air Shuttle.
Only 0.66 per cent of the country’s total population of over 24 million patronise the services of domestic airlines. Last year, Ghana’s aviation market grew by 15 per cent and the same growth rate figure is expected for the industry this year.
Source: Graphic Business/Ghana
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