The government has prevailed on commercial airlines operating in the country’s air space to reduce their fares to reflect positive trends in the aviation industry, especially with domestic air travel hitting its highest patronage.
The call comes in the wake of strong recovery in air travel since the easing of COVID-19 restrictions and the relative improvement in some major operational indicators recorded over the years.
According to the Ghana Airport Company Limited (GACL), domestic passenger flows (throughput) jumped from 423,718 in 2020 to 852,101 in 2022, the highest seen in the industry.
The Deputy Minister of Transport in charge of Aviation, Hassan Tampuli, who made the call at the fourth Aviation Ghana Stakeholders Meeting in Accra yesterday, said the industry benefited from the removal of the 17.5 per cent value-added tax (VAT) on domestic airline tickets in 2017, the reduction in jet fuel price in the past and recently the appreciation of the cedi against the dollar.
Affordability
Mr Tampuli added that it was surprising that improvement in operational indicators seen in recent times had not translated into a reduction in domestic airfares.
“I am aware that in the past, VAT was removed and then restored, but in between the period airfares for domestic travel remained the same. Very recently, the exchange rate went up and then dropped again, yet the fares remained unchanged,” he said.
The deputy minister said last year when jet fuel prices dropped on the international market, the fuel surcharge component on the air ticket remained at GH¢70.
That, he said, was unfair and needed to be addressed to make air travel more affordable to the citizenry and create job opportunities in the country’s aviation space.
Response
The immediate past Chairperson of the Board of Airline Representatives — Ghana, Gloria Wilkinson-Mensah, told the media after the opening of the meeting that the international fuel market was very volatile and did not allow fluctuations to span a long time in order for the reductions to reflect in ticket prices.
She explained that airlines were, therefore, not able to efficiently adjust airfares in connection with a drop in jet fuel prices.
Ms Wilkinson-Mensah said due to the volatility, airlines usually worked within a threshold, which allowed a delay for some specific period before airfares were adjusted to reflect a drop or increase in fuel price.
She noted that fares were denominated in US dollars but passengers had to pay in Ghana cedis, and for that reason the exchange rate for the day of purchase impacted the fare.
“So the dollar equivalent of the fare does not change; rather, the exchange influences the increase in the ticket,” she added.
<<Print>>