The Ghanaian Government has finalized a strategic partnership agreement with Ethiopian Airlines (ET, Addis Ababa) over the formation of a new national carrier. The move follows a Memorandum of Understanding (MOU) that was signed between the two sides in December last year.

According to sources close to developments who spoke to the B&FT newspaper, the final agreement was signed on Wednesday last week and will see the Ghanaian state owning a 51% stake in the new airline with Ethiopian owning the remainder. However, Accra has indicated that its overall plan is to transfer an unspecified tranche to local Ghanaian entities.

“A number of them have expressed interest and the Ministry of Aviation is still speaking with some of the insurance companies and banks who have expressed interest," Simon Allotey, Director-General of the Ghana Civil Aviation Authority (GCAA) later told the B&FT. "But initially, what might happen is that government’s initial shareholding might go beyond 10%. It will hold the shares for the potential Ghanaian investors because we can’t wait for all of them to come on-board before the airline starts."

The airline, whose name has yet to be decided on, will initially focus on domestic Ghanaian routes using a trio of Dash 8-400s. Thereafter, it will expand into the regional and international market. Its launch has been scheduled for the end of May although there is a strong likelihood that this timeline may be extended.

Given the threat of a predatory state-owned entity entering an already competitive market, Africa World Airlines, Ghana's largest carrier by weekly seating capacity, has reacted cautiously to the announcement.

"We have been continuously engaged in discussions with the Ministry of Aviation to partner with them on this project, and we reiterate our continued willingness to do so," an official airline statement said. "We believe that private sector carriers like AWA have helped drive the growth in Ghanaian aviation over the last decade, and we sincerely hope that a venture to be majority owned by the Government of Ghana will continue to drive innovation and competition in the marketplace."

In West Africa, Ethiopian is already involved in Togo-based ASKY Airlines (KP, Lomé) and is a shareholder in the Guinea Airlines (Conakry) project. It was also linked to a strategic partnership agreement with RwandAir (WB, Kigali) but, according to the Rwandan carrier's Chief Executive Officer, Yvonne Manzi Makolo, this is no longer the case.

Speaking to Addis Ababa-based newspaper, The Reporter, Makolo said a final agreement was not reached.

“That agreement did not take off," she said. "I was not with RwandAir when the agreement was signed and I do not know why it did not take off."