www.ghanaweb.com General News of Monday, 28 January 2002

Ghana Airways Nearing Collapse

The struggling national carrier- Ghana Airways, with a debt
burden of $150 million has been suspended from the clearinghouse
of International Airline Transport Association (IATA), seriously
affecting the operations of the airline.

The suspension has affected the airline's inter-airline business
and the company's credit worthiness.  Ghana Airways, which is
nearing collapse save government intervention, owes $90 million
in overdue supplier credit and $60 million in loans.

The Daily Graphic reports that the mounting debts and inability
of Ghanair to break even have combined to threaten the once
viable airline.  Government guaranteed $80 million of the total
debt, meaning that whatever happens, government will have to bear
the amount.

The head of the airline's Management Task Force Captain Kofi
Kwakwa in an interview with the Daily Graphic said, "the infusion
of the $80 million will not solve the problem because the present
operating strategy and equipment will not generate enough income
to pay recurrent expenditure and finance the remaining $70
million."

After the government guarantee, Ghana Airways will need a minimum
of $30 million as working capital.  The options available is for
government to salvage the airline or let it die naturally, thus
loosing out on the potential of becoming the dominant sub-
regional company with stations in all countries of the sub-region.

The collapse of the national carrier would have negative
consequences for the Ghanaian economy "as annual revenue of about
$100 million will go to foreign carriers, over 1000 employees
losing their jobs, and set backs to export promotion, the Gateway
Project, tourism and regional integration.

Ghana Airways and the liquidated Air Afrique are the only
airlines in the sub region with international accreditation. The
eminent collapse of Ghana Airways will be big blow to the sub
region.

Captain Kwakwa says the previous management of E. L. Quartey JNR
left behind enormous problems "including credit from Glodwin
Transworld Limited of Jersey, purchase of three DC9 aircraft from
Venezuela, and two DC10-30 aircraft from Malaysia Airlines."

The Quartey administration also had a spare parts with A J Walter
(Aviation) Limited, the high flyer JT8 D engine lease agreement
and withdrawal of the in-flight magazine 'AKWAABA", all of which
a forensic audit has been instituted into.

The Sam Jonah led Board of Directors without a substantive chief
executive is said to have reduced the monthly net loss of the
airline from about $4 million to $1.4 million, but this does not
seem to reflecting strongly in its operations.

The head of the Management Task Force said the effects of the
September 11 incident on the aviation industry are so damaging
that it is only government intervention that will save the
airline.

Ghanair has already lost two-fifths of its passengers, especially
from North Africa since the September 11 attack.  Swissair and
Sabena collapsed after the September 11 terrorist attack on the
World Trade Centre in New York using for different aircrafts.

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