Last week the Ghanaian government concluded negotiations with EgyptAir for a joint venture that will establish a new national airline in Ghana. A previous attempt at creating a partnership with Ethiopian Airlines fell through over issues such as routes and funding. The only thing remaining for the new deal is for it to be approved by Ghana’s Parliament.
On Tuesday, December 15th, the online news outlet GhanaWeb reported that Ghana’s Minister for Aviation, Joseph Kofi Adda, had announced that an agreement had been reached with EgyptAir to help launch a new Ghanaian flag-carrier.
Parliament remains the last step
The negotiations between the two parties to establish a joint venture were concluded last week. This means that almost everything is ready for the creation of a new national airline in West Africa.
“We have indeed completed negotiations that we need to conclude with our partner, Egypt Air,” Mr Adda said, according to GhanaWeb.
“We have compiled all we need to compile, which includes the shareholders’ agreement, the business plan, to ensure that we get the approval of the key agencies from Ghana. Parliament is the only step left for us to have a national airline.”
So, the deal just needs to gain Parliamentary approval. This may be easier said than done, considering Ghana is just coming off general elections, held on December 7th. The results of the election saw the incumbent President Nana Akufo-Addo and his New Patriotic Party hold on to power. However, it lost its previously strong majority in Parliament.
This means that the government may try to push the agreement with EgyptAir in the legislative proceedings before Parliament reconvenes in its new configuration in January.
EgyptAir to take majority stake
While details of the deal remain unclear, EgyptAir is expected to take a majority equity stake in the emerging new airline. This makes sense from an operational and financial viewpoint as the two previous Ghanaian state-owned carriers went bankrupt; Ghana Airways in 2004 and its successor Ghana International Airlines in 2010.
Deal with Ethiopian fell through due to disagreements on key issues
The Memorandum of Understanding (MoU) was signed by the two prospective partners in October. Previously, Ghana was looking to Ethiopian Airlines, one of the most successful carriers in African aviation, for such a partnership. In the end, the deal with Ethiopian fell through due to disagreements over issues such as routes, funding, and tenure of the management contract.
Nonetheless, the concluded negotiations with EgyptAir could be the end of a process that began in 2016 with the quest to launch a new Ghana Airways. The Ghanaian government hopes, will subsequently lead to the establishment of Accra and Kotoka International Airport as a West African aviation hub.
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