FAA COMPLETES REASSESSMENT OF GHANA

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
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