Int’l airlines unfazed by economic challenges …but domestic carriers struggling

International airlines operating in the country, despite the challenging economic conditions, are recording relatively good passenger numbers on most routes, with airline managers maintaining an outlook of optimism that is scarce in other industries.

Though high inflation, taxes and rising cost of living have dampened the value of disposable incomes, growing commercial activities with Europe, Asia and the Middle East is driving traffic to and from Accra.

The passenger load factor – a measure of the proportion of airline seats that are filled – of major carriers ranges from above 80-100 percent, according to B&FT’s checks.

Lufthansa, which recently introduced an A330 on the Accra-Frankfurt route, is recording a load factor of above 85 percent, while TAP Portugal, the national airline of Portugal which operates an A320, is recording full flights on its Accra-Lisbon route, officials said.

The load factor of other prominent carriers such as Emirates, KLM, and British Airways has also defied the economic difficulties Ghana has been experiencing -- with a currency that has lost more than one-fifth of its value against the dollar in just five months.

Mr. Dionisio Barum, TAP Portugal’s Head of African Operations, said in an interview that “what is contributing to the Accra traffic is not only from the Portuguese market but mainly from Europe, where the UK market is very strong.

“Ghanaians are spread all over Europe, and all those countries are increasingly demanding our products. This is because we are increasing capacity and increasing seats on our offering to Ghana.”

João Inglês, TAP Portugal’s General Manager for Cape Verde Islands & Ghana, added that “Ghana is a country developing very well. Businessmen are looking to establish businesses in Ghana and help develop the economy. The business traffic from Ghana will support the growth, going forward.”

TAP, which operates five flights every week from Accra to Lisbon with onward connections to about 75 destinations, plans to start daily flights from July due to the favourable traffic, officials said.

The aviation industry is among the country’s fastest-growing economic sectors, with annual growth in traffic of around 10 percent in the past decade. In 2013 passenger traffic on the 28 airlines flying to Accra was 1.7million, equalling the traffic in 2012.

Mr. Hendrik Du Perez, Emirates’ Country Manager, said even though disposable incomes have been hit by the current economic challenges, the airline is recording full capacity on the Accra- Dubai route with several onward connections.

The story is not similarly rosy for domestic carriers, however, who bank on the country’s nouveau middle-class to drive traffic. Beside the high operating costs domestic carriers confront, their usual clients are also squeezing spending to contain high inflation and the weak cedi.

Currently, all four domestic airlines are struggling to cover their cost of operations, officials told the B&FT, adding that they are looking to government to stabilise the macroeconomy, curb inflation, reduce the high cost of credit and introduce incentives for the industry.

By Dominick Andoh | B&FT Online | Ghana