Airline operators decry cost of doing business in Ghana

Some airline operators in Ghana have expressed concern about the cost of doing business in Ghana.

The reduction is expected to among other things bring down the cost of an air ticket.

However, other cost elements such as the weak currency, ground handling and difficulties with the clearing of import parts is a nightmare to operators in the airline sector.

President John Mahama said recently that one of the complains he'd constantly received was the cost of aviation fuel when he commissioned the newly constructed Arrival Hall of the Kotoka International Airport (KIA) and the Ghana Civil Aviation Training Academy within the airport enclave, Accra that

“As a result, we consulted the National Petroleum Authority and it has agreed to adjust the price of aviation fuel and reduce it by 20 percent," he added.

According to analysts, a 20% reduction in aviation fuel will still be higher than it is sold in the West Africa sub-region.

In a newspaper interview, the Managing Director of Gianair, Roberto Billia said it has been a "nightmare operating in Ghana"

"As an investor in Ghana, the government needs to allow me to profit from my investment. My fees for operating in the Accra airport has increased to 400 percent in two years," he told the Business and Financial Times.

The concerns of airline operators have been compounded with the decline in the number of people who use air transport as a means of travelling within Ghana.

According to the Ministry of Transport, there were 195,447 passengers between January and June 2016 compared to 288,968 in 2015.

According to the sector minister, Fiifi Kwetey, the drop can be attributed to the high cost of air tickets.

“The reduction in the domestic passenger movement largely is a combination of the difficulties in the increase in aviation fuel cost last year and also the fiscal issues that brought about introduction of VAT,” he said at a press conference in Accra.

Local airlines complain that value added tax (VAT) on aviation fuel and other charges, which are passed on to passengers, is the reason why tickets are dear.

The government has been trying over the years to increase domestic air travel numbers because it is a faster and safer mode of transport.

However, within the period under review, international passenger numbers recorded an increase; up from 754,553 passengers in 2015 to 837,019 passengers.