[ 2012-08-14 ]

Air fares are exorbitant
Air transport operators have renewed their call
for a review of the tax regime in the aviation
industry in order to make air transport cheaper.

Operators and passengers have complained about the
high cost of air travel in the country relative to
other countries within the sub-region and in
Europe.

"With the [high] taxes [being charged] we cannot
reduce our fares, but we provide a reliable and
efficient flight schedule and operations. It costs
about US$550 from Accra to Abidjan for a flight
time of one hour; the fare is increased by about
US$150 as taxes and fees. Comparatively for a
3-hour flight in the US or Canada it costs less,"
Dr. Brock Friesen, Co- Chief Executive Officer of
Starbow, told the B&FT

Recently, the issue of high airfares has been a
thorny one between operators and the regulator --
the Ghana Civil Aviation Authority.

While operators contend that high government taxes
and fees form a large chunk of the price of
airfares passengers pay, government on the other
hand has warned of drastic measure to force
international airlines to reduce their fares.

The taxes and fees for a round trip between Accra
and London are approximately US$500-US$965.50 per
adult. For a ticket that costs US$350, passengers
pay about US$500 in taxes bringing the total price
to US$850.

"Authorities should review the level of taxes
being charged. The level of taxes does not
encourage people to travel. If the taxes are
reviewed, it will bring down the cost of airfares
considerably," Mr. James Wooldridge, the Country
Commercial Manager of British Airways, said in an
earlier interview.

He urged authorities to upgrade facilities at the
only international airport in the country, Kotoka
International Airport, to a level that is
commensurate with the taxes and fees charged.

Business-class passengers of various airlines do
not enjoy much differentiated service in the
entire departure process of a travelling
passenger, given the relatively high taxes and
fees embedded in the price of their tickets.

"For paying something extra as a business-class
passenger or first-class passenger, you need to
have some level of differentiated service to be
able to appreciate that you have paid extra for a
value-added service," Gloria Yirenkyi, Country
Manager of South African Airways, told the B&FT in
an interview.

Though the Ghana Airports Company Limited has
created a dedicated lane for immigration
processing of first-class or business-class
passengers, operators have to invest in
value-added services for their elite clients
through the provision of comfortable lounges and
other services in the departure processes.

The country's aviation industry, with an average
growth of 10 percent, is one of the fastest
growing and the most competitive in the West
African sub-region.

The aviation industry also grew by 15% last year.
International and domesti

c carriers are therefore tapping into the regional
market.

Projections by the Ghana Airport Company show that
air passenger traffic is expected to hit six
million by 2015. This represents an expected
increase of more than 200 percent over the total
passenger throughput of 1.8million recorded in
2011.

The number of carriers has grown from 15 in 2000
to an estimated 40 carriers this year, with more
international airlines currently undergoing the
necessary certification processes to acquire
licences to enable them fly into the country.

Gambian Bird and Royal Jordanian Airlines are
undergoing the necessary designation processes,
while Pison Airline is undergoing the necessary
processes to acquire the needed certificate in
order to operate regional and international
flights to Accra.

A Global Market Forecast 2011- 2030 conducted by
Airbus, the world's leading aircraft manufacturer,
projects that Accra and Lagos will be aviation
“mega-cities” come 2030, with the two destinations
handling more than 10,000 daily long-haul
passengers.

The quest for dominance in these countries is also
fuelled by strong economic growth of the two
countries and the resulting increase in the
standard of living.

In 2011 Ghana's economy grew at 14.4 percent
boosted by discovery and production of oil in
commercial quantities and a rebounded construction
sector. The Gross Domestic Product for 2012 is
expected to reach 7.5 percent.

Source - Thebftonline.com

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