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Lufthansa defaults on royalties owed
to Ghana Airways, says Minister for Aviation
Accra, July 18, Ghanadot/GNA – Ms. Gloria Akuffo, Minister
for Aviation, on Wednesday lashed out at Lufthansa, the
German Airline, for its withdrawal from the Accra route
saying the manner in which it was executed smacked of bad
faith.
“Lufthansa’s withdrawal and the manner in which it was
executed smacks of bad faith which the Ministry regards as
rather unfortunate,” she said in a statement issued in
Accra.“
“Therefore, Lufthansa alone is responsible for the
repercussions of its conduct,” Ms Akuffo added.
Ms Akuffo said in view of the good relationship that had
existed between Ghana and Germany, the Ministry and
therefore Government were nonetheless determined to pursue a
successful resolution of all the issues arising out of this
matter provided Lufthansa was willing to reciprocate the
gesture in the larger interest of the two countries.
She stressed that the Ministry of Aviation did not order
either the stoppage or withdrawal of Lufthansa’s operations
into Accra.
Giving the background to the case, Ms Akuffo said for over
three years now Lufthansa had been operating seven flights
per week into Ghana.
Two of these flights were granted by the Government of Ghana
under a normal Bilateral Air Services Agreement (BASA)
between the Governments of Ghana and Germany while the
additional five were also granted by Government of Ghana as
part of a commercial agreement between Lufthansa and the
then Ghana Airways Co. Ltd.
Royalties payable for the additional flights were to be paid
to Ghana Airways as part of Government’s capital infusion
into the airline.
She said under the Commercial Agreement, Lufthansa was to
pay royalties for the use of the additional frequencies by
picking up Ghana Airways passengers on its Accra-Lagos route
and back.
“In February 2005, Lufthansa unilaterally without just cause
nor any notice to Ghana Airways refused to pick up Ghana
Airways passengers, thereby defaulting in its payment for
the royalties of the five additional flights.”
She said after Ghana Airways went into liquidation in June
2005, the Official Liquidators (OL), as part of its effort
to meet creditor debts, made a demand on Lufthansa for the
payment of the debt arising out of the default.
She said royalty payment realisable from the sale of GH
tickets on the Accra-Lagos route averaged $150,000 per
month.
“Lufthansa’s default ran for a period of over two years and
notwithstanding the many demands made by the official
liquidator, Lufthansa persisted in its default while it
continued to utilize the five additional frequencies even up
until the last day of its withdrawal of operations in Ghana
leaving in its trail an outstanding debt which originally
stood at over $4,000,000.”
She said consequently in June 2006, the OL, out of
frustration sought the intervention of the Chief of Staff
and Minister of Presidential Affairs who was also
responsible for the Aviation Portfolio.
Ms. Akuffo said the request of the Chief of Staff to
Lufthansa prevailing on them for a speedy resolution of the
matter went unheeded.
Subsequently, she also wrote to Lufthansa making
substantially the same request, but this also went unheeded.
“The Minister for Aviation was therefore constrained to
direct both the OL and Lufthansa to resolve the matter
within a period of a month, dating from the 30th of May,
2007 or risk having the five additional frequencies
withdrawn by Government.”
Ms. Akuffo said Lufthansa’s response to this last letter was
“to bait the Minister and a team with an offer of an
all-expenses paid trip to Germany ostensibly to resolve the
matter’ but they turned it down.
The Minister said eventually a Lufthansa group met with
representatives of the Ghanaian side, at which meeting
Lufthansa requested for up to the end of the year to settle
the matter with the OL.
“Naturally this was refused by the Minister on the ground
that all the issues had already been clearly identified and
what remained was a matter of the parties seriously
committing to a settlement.”
Ms Akuffo said before the end of the June 30 deadline, the
parties met in Germany and succeeded in substantially
concluding an agreement in which the OL agreed to accept the
sum of US $1,200,000 in total and final settlement of the
original claim of over US $ 4,000,000.
A draft text of the terms of agreement has since been
submitted to the OL by Lufthansa, she said.
Ms Akuffo said a number of issues, however, arose out of the
draft terms of agreement that was submitted by Lufthansa.
These are whether or not the Ministry of Aviation should be
a signatory to the settlement agreement, the terms of
payment of the agreed sum of US $1,200,000 and demand by
Lufthansa for a letter from the Ministry of Aviation to
abrogate a purported Commercial Agreement between Lufthansa
and Ghana International Airlines Limited (GIAL) in respect
of the same five additional frequencies under discussion.
Ms Akuffo said before the OL could make a response to the
draft terms of agreement, Lufthansa demanded that the
agreement should be signed in the draft form without any
amendment whatsoever, a position which was rejected by the
OL.
She said in the meantime, the Minister for Aviation having
seen that progress was being made by the parties in reaching
an agreement, granted three extensions, 7th July, 14th July,
and 21st July 2007 respectively to the deadline of 30th
June, 2007 to allow the parties to conclude the agreement.
“It therefore came as a surprise when Lufthansa announced
the withdrawal of its operations on the 15th of July, 2007
through the media, a decision which the Ministry finds
rather bizarre and the motive still unclear,” Ms Akufo said.
GNA
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