President John Dramani Mahama has appealed to players in Ghana’s domestic aviation sector to respond positively to government’s recent announcement of a reduction in the cost of aviation fuel by reducing their air fares.
According to him, lowering air fares would increase patronage of services across all routes in the country.
The President made the appeal in Tamale last Friday when he commissioned the first phase of the upgrade and expansion of the Tamale Airport into an international one.
The ceremony also saw the commencement of direct flight departures of Muslim pilgrims from the northern half of the country to Mecca in Saudi Arabia to fulfill their religious requirements.
President Mahama said the aviation sector in Ghana had in recent times experienced tremendous growth and remained a very significant element towards the attainment of the country’s transformational agenda.
“It is therefore imperative for all stakeholders to strive hard to sustain the momentum. Following government’s reduction of the cost of aviation fuel, it is our expectation that air fares will be reduced to help sustain the growth being experienced in the industry,” the President charged.
Early last week, the remaining two players in Ghana’s domestic aviation sector renewed their call on government to withdraw the 17.5% Value Added Tax imposed on air fares two years ago.
The introduction of the tax had according to them led to a 40% drop in patronage of flight services across the country.
One way air fare from Accra to Kumasi is GH¢315 inclusive of the VAT. Passengers would however pay GH¢270 without the VAT. Passengers travelling from Accra to Tamale now pay GH¢500 inclusive of VAT but would have paid GH¢426 without the tax.
The domestic airline operators in earlier interviews with this paper insisted that a withdrawal of the VAT would better serve the interests of all stakeholders.
“Air fares will come down as soon as the tax is withdrawn,” stated Chief Executive Officer of Starbow, Mr James Eric Antwi.
Chief Operating Officer for Africa World Airlines (AWA), Captain Samuel Thompson pointed out the GH¢45 component of the tax in the one way air fare from Accra to Kumasi “means a lot of money to many people.”
The VAT component of the Accra to Tamale fare is as high as GH¢74.
Ghana’s aviation sector’s growth, according to President Mahama had provided the compelling justification for urgent improvement in facilities and infrastructure at all the country’s airports.
Mr Mahama explained that the development of aviation infrastructure in all 10 regions of the country was in preparation of plans to boost tourism, business and investments.
“The decision to upgrade the Tamale Airport to an international one is a well thought-through programme aimed at extending opportunities to the people of the north for accelerated growth and development of our people,” President Mahama observed.
Beyond facilitating the movement of people from one destination to the other, the airport, he disclosed would also support the Savannah Accelerated Development Authority (SADA) in its programme to enhance the export of perishable goods especially fresh agricultural products.