In 2000, Ghana Airways offered flights between Accra and Baltimore, Maryland, but it was liquidated and collapsed in 2004.

The collapse was attributed to its high debt situation, management problems and operations.

Read the full article originally published on May 9, 2023 on www.ghanaweb.com.

In 1958, Ghana Airways burst onto the scene to become the national carrier of Ghana. The airliner was a joint venture between the Government of Ghana, which held a 60 percent stake, and the British Overseas Aircraft Corporation (BOAC), holding the remaining 40 percent.

It operated from its main hub at Kotoka International Airport.

According to simpleflying.com, Ghana Airways was under a seven-year contract with BOAC staff who initially operated the airline, while some of the Ghanaian staff were sent to London for training.

Over the years, Ghana Airways flew the Ghana flag on its wings and anyone associated with this flying experience was considered elite and often radiated a certain pride.

Ghana Airways used two Boeing 707-420s and three Vickers VC10s to begin flights to the United States, as well as to Sydney in Australia and Tokyo in Japan.

But the business side began to raise alarm bells, leading to the subsequent collapse of Ghana Airways, for several reasons.

In the early 2000s, Ghana Airways’ financial problems became evident as demand for flights increased and the airline’s workforce became enormous. The airliner also struggled to compete with other private carriers that were deploying innovative operating methods.

GhanaWeb Business takes a look at the main reasons why Ghana Airways failed to live up to its expectations.

Management and Operational Issues

After a few years of successful operations, Ghana Airways decided to step away and become an independent entity by entering into an agreement with BOAC to buy out the airline’s 40 percent stake.

While this move was laudable, the company’s management was now facing stiff competition from private airlines, which were beginning to provide more impeccable services than Ghana Airways.

Former BOAC CEO Sir Duncan Cumming, when presented with a check for the deal, simultaneously signed a contract renewing the BOAC management agreement which had first been signed in 1958.

This agreement would have been in force until July 1961 after the Government of Ghana announced that it was reorganizing the airline and canceled Ghana Airways’ commitment for the two Boeing 707s it used for its operations under the management of BOAC.

But about three years before the contract expired, Ghana Airways management reportedly terminated its pool agreement with BOAC and instead signed a new agreement with Alitalia to cooperate on flights between Accra and Rome.

However, this did not please BOAC, leading to frosty working relations between the British carrier and Ghana Airways, even though the British airline remained the handler of Ghana Airways’ ground operations at the airport. ‘Heathrow in London.

Ghana Airways debt situation

According to simpleflying.com, Ghana Airways has accumulated debt over the years, amounting to around $160 million, with its former chairman, Sir Sam Jonah, indicating that the company would not survive without a foreign partner.

Before its collapse in 2004, Ghana Airways was able, in 2000, to operate flights between Accra and Baltimore, Maryland, and the following year it decided to operate flights via transit to Banjul in the Gambia, as part efforts to increase its reach. and respond to demand.

But the strategy failed when passengers in Banjul threatened to burn down the Ghana Airways offices after a full flight landed in Banjul from Accra in January 2002, took on fuel, and then left for Baltimore, leaving Gambian passengers hoping to travel to Baltimore stranded at the airport.

The same year, Ghana Airways had one of its DC-10s seized at London’s Heathrow Airport after British creditor BOAC obtained a legal joinder to recover part of the £4 million it owed. were due.

The British creditor, however, released the DC-10 airliner after receiving a $1 million debt payment, a mere amount of Ghana Airways’ debt to the British airline.

In September 2002, the impending collapse of Ghana Airways was almost an open secret after the government of Ghana announced that it had reached an agreement with South African Nationwide Airlines, adding that Ghana Airways would now be renamed Ghana Nationwide International Airlines (GNIA).

Although this agreement and relationship with the South African company only lasted a year, the government of Ghana declared in 2003 that it had withdrawn from the agreement with GNIA and was now involved in another company called British Midland.

Under the new agreement, Fly Ghana Limited has been designated as the government’s major shareholder. It was planned to operate for a short period under a separate entity from Ghana Airways before the two parties formed the new Ghana Airways franchise.

Under the plan, British Midland was to supply two Airbus A330s for the Accra-London and Accra-New York routes, with the DC-10s being used on other long-haul international routes while the new Ghana Airways would operate flights regional on the Fokker. Fleet of 100 airlines.

Finally, in 2004, the inevitable happened when it was discovered that the new Ghana Airways was operating under the pretext of an unsafe aircraft and an expired license.

This led the United States Department of Transportation to ban the airline, forcing it to cancel its flights to New York and Baltimore.

The ban on Ghana Airways, however, led the Ghana government to fire its entire board of directors, with the state taking full control of the airline, which was still left with even greater debt and operational problems.

As part of efforts to revamp the airline, Ethiopian Airlines had offered to help keep Ghana Airways afloat, but proposed a deal that would see the government get a 25 percent stake in the airline.

The government of Ghana subsequently refused the proposal, leaving the airline liquidated in mid-June 2005.