US embassy cable - 05ACCRA407

C O N F I D E N T I A L ACCRA 000407 
 
SIPDIS 
 
DEPT PLEASE PASS FOR TREASURY ALEX SEVERENS 
FAA NATIONAL HEADQUARTERS WASH D.C. FOR LARRY KEPHART 
MULLENIUM CHALLENGE CORPORATION FOR ROD NORMAN 
 
E.O. 12958: DECL: 02/24/2015 
TAGS: ECON, EAIR, EINV, GH, aviation 
SUBJECT: FAA COMPLETES REASSESSMENT OF GHANA 
 
REF: ACCRA 369 
 
Classified By: A/DCM David Queen for reasons 1.5 (b and d) 
 
1. (SBU) Summary: FAA has completed its reassessment of the 
Ghana Civil Aviation Authority (GCAA).  The FAA team was 
impressed with the progress made by the GCAA staff since the 
last visit in December 2004 (reftel).  In the short term, 
however, Ghana will be downgraded to Category II status 
sometime in the next 60 days, primarily because neither of 
the two airlines registered in Ghana that intend to fly to 
the US--MK Airlines and the new Ghana International Airlines 
(GIA)--have submitted the documentation necessary to be 
licensed under Ghana's new civil aviation law.  FAA intends 
to provide technical assistance during the licensing of 
either GIA or MK.  Once the process is completed 
satisfactorily, FAA will restore Ghana's Category I status. 
GIA will step up its efforts to initiate the licensing 
process as quickly as possible in the hope that investors 
will not be scared off by the downgrade.  End Summary. 
 
2. (SBU) FAA team leader Larry Kephart said GCAA had done 
everything in its power to address the deficiencies outlined 
in FAA's December report.  GCAA corrected most of the 
problems outlined in FAA's report before the team arrived. 
Training not available in Ghana had either been commenced or 
booked, although GCAA Safety Director Edward Akohene 
complained that open courses were difficult to find.  FAA's 
regional representative Ed Jones said he would look into 
making space available for GCAA's inspectors in FAA courses. 
 
3. (SBU) In the end, however, retaining Category I status, at 
least in the near-term, was not in GCAA's hands.  Ghana's 
newly minted civil aviation law--which replaces the old, 
sub-standard law--enters into force March 1.  The proper 
licensing of air carriers under the law is an essential 
component of Category I status.  The airlines themselves must 
initiate the licensing process by submitting manuals based on 
the new regulations.  Once those manuals are approved by 
GCAA, the licensing process enters a "demonstration phase", 
in which GCAA will physically observe procedures outlined in 
the manuals.  FAA proposed technical assistance for the 
demonstration phase, which, when completed, will allow FAA to 
restore Ghana to Category I status.  NOTE: FAA will draft a 
Technical Assistance Agreement as soon as possible.  END NOTE. 
 
4. (C) GIA's representative Albert Vitale sat in on FAA's 
outbrief of GCAA with FAA's permission.  During the meeting, 
Vitale handed Safety Director Akohene a letter stating GIA's 
intent to begin operation in October, instead of in July, as 
originally planned.  Vitale told EconOff in a side meeting 
that GIA would probably still begin operations in July with 
wet-leased aircraft from a US carrier, which is legal while 
Ghana is in Category II status.  He was surprised that 
Ghana's status now rested on GIA's ability to move forward in 
the licensing process, and said he would try to accelerate 
his company's application.  He expressed concern that news of 
the downgrade would leak out and scare off investors.  GIA 
has most of the USD 55 million it needs to begin operations 
in escrow.  Vitale said escrow should close in the next 30 to 
60 days, but news of a downgrade would upset that timeline 
and cause some investors to pull out.  NOTE: FAA will post 
Ghana's status on its website when an official decision is 
made sometime in the next 60 days.  No press release or 
public announcement will be made.  END NOTE. 
 
5. (SBU) Comment:  GCAA Director General Nii Badoo also 
expressed concern with the public nature of the downgrade and 
asked for conditional Category I status, which Kephart ruled 
out.  It is possible that GCAA could avoid this by moving MK 
or GIA through the licensing process before FAA makes its 
official decision.  FAA team members told EconOff this was 
unlikely, however, judging by the current status of the 
airlines' applications.  If news of the downgrade gets into 
the Ghanaian press, it will certainly be an embarrassment to 
the government.  Regardless, if the GoG can continue to 
support GCAA, it will be rewarded with a new national carrier 
servicing the much-needed direct routes to the US- an 
accomplishment it can be proud of, considering the late 
flights, baggage-filled lavatories, and rusted planes that 
defined Ghana's civil aviation less than 12 months ago. 
YATES