The government of Ghana has chosen EgyptAir (MS, Cairo International) as its strategic partner for the re-establishment of a new Ghanaian flag carrier.
A Memorandum of Understanding (MoU) between Ghana’s Aviation Minister Joseph Kofi Adda and EgyptAir’s Deputy Chairperson Hassan Mounir was signed in Accra on October 21, 2020. The choice of EgyptAir as the preferred strategic partner follows a series of engagements between a senior management team of EgyptAir and a committee of aviation experts tasked by Ghana’s Ministry of Aviation.
Ghana in 2018 had signed a similar MoU with Ethiopian Airlines (ET, Addis Ababa International) in terms of which the Ethiopian flag carrier would have contributed funding, equity, aircraft, and management services for a new Ghananian national airline. However, the deal was held back due to disagreement over key issues such as routes, funding, and tenure of the management contract reported Aviation Ghana. According to a report by GhanaWeb, EgyptAir had presented a “remarkably more attractive proposal”. A shareholders' agreement was still expected to be finalised in the coming weeks. The agreement would also need to be ratified by Ghana’s parliament. The government was expected to maintain a 10% shareholding in the new airline, with the majority of shares to be held by private investors. The government previously said its role would be to “kick-start” the new carrier and then take a back-seat in its operations.
Adda told reporters after the signing ceremony: “We were looking out for what is best for Ghana in all our engagements with the potential partners.”
EgyptAir Chairman and Chief Executive Officer Amr Abu El-Enein said: “We are pleased with the confidence of the Ghanaian government in choosing and preferring EgyptAir for this strategic partnership in establishing a new airline operating from its headquarter in Accra, with a network of routes throughout Africa, connecting it with countries in North and South America.”
Egypt was keen to strengthen cooperation with African countries and develop aviation on the continent, Cairo media reported. EgyptAir’s holding company in 2018 reportedly already signed a contract with Ghana’s Ministry of Aviation for MRO services at Kotoko International Airport, Accra.
In September 2020, Egypt’s Finance Ministry said it would guarantee long-term financing of EGP3 billion Egyptian pounds (USD191 million) from the Central Bank of Egypt to help maintain EgyptAir’s operations, positioning it to support Ghana in relaunching its national carrier.
Ghana has been without a national airline since the collapse of Ghana International Airlines (Accra) in 2010, following on the demise of Ghana Airways (Accra) in 2004. In 2019, Ghana’s government signed a provisional order for three B787-9s and six DHC-8-Q400s for the new national airline.
The agreement comes as IATA downgraded its traffic forecast for Africa for 2020 to reflect a weaker-than-expected recovery. The association now expects full-year 2020 passenger numbers in Africa to reach only 30% of 2019 levels, a significant downgrade from the 45% projected in July 2020. IATA said forward bookings for air travel in 4Q2020 showed a continued slow recovery. Although domestic travel was picking up across Africa as countries reopened their borders, international travel remained heavily constrained.
Ghana is one of several African countries, amongst them Uganda, Zambia, and Senegal, that are reviving their national carriers. This comes ahead of the start on January 1, 2021, of trading under the Africa Continental Free Trade Agreement (AfCFTA). This will bring together 54 member states of the African Union (only Eritrea has yet to sign), covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than USD3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization (WTO).
However, liberalisation of African airspace and visions of a single unified air transport market in Africa under the African Union’s Single African Air Transport Market (SAATM) has had mixed success to date. Although 34 countries have so far signed up – representing more than 80% of the existing aviation market in Africa – only 18 have signed Memorandums of Implementation to remove restrictions in existing bilateral air services agreements, according to the AFCAC (African Civil Aviation Commission), the executing agency of SAATM.
