Ghana's Airfare Rip-Off: Expert Lays Blame on Market & Taxes!
Economist Professor Peter Quartey identifies a combination of taxes, fuel costs, a small market, and high capital costs as reasons for Ghana's high domestic airfares. He suggests developing the industry and creating a favorable environment to attract more investment and reduce prices.
Professor Peter Quartey, an economist, has provided a comprehensive analysis attributing Ghana’s persistently high domestic airfares to a confluence of factors, including a constrained aviation market, low income levels among the populace, significant tax burdens, high aviation fuel costs, and the elevated cost of capital. These insights come amidst widespread public concern regarding the affordability of domestic air travel in Ghana, with passengers frequently drawing comparisons to fares in other nations.
Speaking on Joy News’ PM Express Business Edition, Professor Quartey highlighted that the issue of high operating costs extends beyond the aviation sector. He noted that other industries, such as hotels and rental markets, also exhibit notably high prices, suggesting a broader economic environment where the cost of doing business is generally elevated.
A critical factor identified by Professor Quartey is the relatively small size of Ghana’s domestic aviation market compared to countries like Nigeria. He explained that Nigeria's larger population and heavier air traffic enable airlines to operate more aircraft, fostering greater competition and economies of scale, which ultimately allows for lower ticket prices. In contrast, Ghana’s smaller market means fewer operators must charge higher fares to cover their operational costs due to less competition and lower traffic volume.
Furthermore, Professor Quartey pointed to lower income levels in Ghana as a significant deterrent to domestic air travel. He observed that most Ghanaians opt for more affordable road transport options, such as 'trotro' or buses, rather than flying, thereby limiting demand for domestic flights and consequently affecting airlines' pricing strategies.
The tax environment in Ghana also received strong criticism from Professor Quartey, who argued that the aviation industry is being