Businesses

EgyptAir and Ghana sign partnership MoU for new national carrier

Ghana seeks to become the aviation hub of the Sub-Saharan Africa region through to establishing a new flag carrier. Interestingly, the country has one of the fastest growing economies in the world. Last year, Ghana signed the Memorandum of Understanding (MoU) with Ethiopian Airlines (ET) to establish a new national carrier for the country. But now the government of Ghana has chosen EgyptAir as the preferred strategic partner. So, what happened?

Source: Egyptair

What is an Mou?

According to Investopedia, a Memorandum of Understanding (MoU) is an expression of agreement to proceed. It indicates that the parties have reached an understanding and are moving forward. Since there is still no contract, an MoU is not legally binding.

Lack of Agreement between Ghana and Ethiopian Airlines

In the initial Memorandum of Understanding signed with Ethiopian Airlines (ET), the government said ET can hold up to a 49 percent stake. The remaining 51 percent were to be split between the state and private investors. The state was allocated 10 percent and individuals and institutional investors were offered 41 percent. But the choice of Ethiopian Airlines as the strategic partner was held back due to a lack of agreement over key issues. These include routes and tenure of the management contract.

MoU between Ghana and Egyptair

The government of Ghana has chosen EgyptAir as the preferred strategic partner in the establishment of a new viable national carrier for the country. According to AviationGhana, EgyptAir‘s proposal was ‘much better’ than Ethiopian Airlines’s proposal.

The MoU was signed by the Ghanaian Minister of Aviation, Joseph Kofi Adda, and the Assistant President of EgyptAir, Hassan Mounir. The agreement is expected to be submitted to Ghana’s parliament for approval in the coming weeks.

This [The deal with EgyptAir] has come at a time when the Africa Continental Free Trade Agreement is to come into effect early next year. Once the airline is set up, it is expected to play a key role in passenger and cargo transport within the continent and between Africa and other parts of the world.

Aviation Minister, Joseph Kofi Adda

Ghana’s New Carrier

The country seeks to become the aviation hub of the sub-region. The new carrier, to be based in Accra, is planned to connect cities across Africa, in addition to launching flights to the two Americas.

EgyptAir

EgyptAir which was founded almost 90 years ago is owned by the Egyptian government as the aviation sector is considered a strategic sector. The airline operates passenger and freight services to more than 75 destinations in the Middle East, Europe, Africa, Asia, and the Americas. (If you’re interested in finding out how Egyptair is trying to steer out of the Covid-19 crisis check out this article here)

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