AMBASSADOR DISCUSSES FAA REASSESSMENT WITH

C O N F I D E N T I A L ACCRA 000505

SIPDIS

E.O. 12958: DECL: 03/10/2015
TAGS: EAIR EINV GH
SUBJECT: AMBASSADOR DISCUSSES FAA REASSESSMENT WITH
PRESIDENT KUFUOR

REF: A. ACCRA 407


B. ACCRA 369

Classified By: Econ Chief Chris Landberg for Reasons 1.5 (b and d)


1. (C) Summary: Ambassador Mary C. Yates met with President
Kufuor March 9, to discuss FAA's assessment of the Ghana
Civil Aviation Authority (GCAA). National Security Advisor,
Francis Poku, arranged the meeting. The Ambassador and
EconOff explained FAA's decision to downgrade Ghana to
Category II status as well as the conditions under which
Category I could be regained. Kufuor appeared surprised by
the decision, and said that oversight of both GCAA and the
new Ghana International Airways (GIA) would placed under a
new Ministry of Aviation attached directly to the President's
office. End Summary.


2. (C) Ambassador Yates was scheduled to meet with Kufuor to
discuss other issues on March 9 at 1730. Late on March 8,
however, Poku requested a separate meeting to focus strictly
on FAA's recent reassessment of GCAA (ref B). In the
meeting, the Ambassador explained FAA's decision to downgrade
Ghana until a Ghanaian airline could be licensed under the
new civil aviation law. In the meantime, Ghanaian airlines
will not be permitted to fly to the US. The Ambassador also
said FAA was ready to provide technical assistance during the
licensing in order to ensure success, but that the timing of
any recertification of GCAA was contingent upon the
completion of the license application process by one of the
Ghanaian airlines -- either GIA or MK Cargo -- that intends
to fly into the US. The President asked whether MK Cargo
could finish the process before GIA. EconOff said that MK,
as a strict cargo carrier, could, theoretically, be licensed
faster than GIA. The President asked several times about MK
as the quickest way to qualify for return to Category I
status.


3. (C) Kufuor explained that he was disappointed with FAA's
decision since his government had committed extra resources
to ensure that GCAA complied with FAA's report (ref A).
EconOff said that FAA was impressed with what GCAA had
accomplished between the December and February visits, but
that Category I status could not be granted if GCAA had not
yet demonstrated a capacity to license an airline under the
new law. EconOff also explained that GIA could fly directly
to the US from Ghana under a wet-lease arrangement with a US
carrier while Ghana was in Category II. The
President said GIA's operations were being delayed by the
settlement of issues related to the GoG's position in the
ownership structure and the possible addition of Ethiopian
Airlines as a minority partner. The President said Ghana
would own 51 percent of GIA, Ethiopian 10 percent, and the
American investors the remaining 40 percent. He also
remarked that he needed to know more about who "the Utah
investors were." Kufuor requested that FAA's decision not be
made public or, if possible, delayed in order to allow GIA to
complete the licensing process. The Ambassador said that us
law required FAA to make its decision public on its website,
but that no public statement would be made by either FAA or
the Embassy regarding the downgrade.


4. (C) Comment: The President appeared to be surprised by
FAA's decision, calling into question the quality of
information he has been getting from subordinates on this
issue. As the meeting concluded he said he had been
misinformed about the situation and that action would be
taken. He said control of GCAA and GIA would be taken from
Minister of Roads and Transport, Dr. Richard Anane and placed
under a new Aviation Ministry attached directly to the Office
of the President. Anane -- accused of corruption and the
improper use of Ghana Airways' funds during his vetting in
February -- is believed to be ultimately responsible for the
dysfunctional relationship between GCAA and Ghana's banned,
bankrupt, and dissolved national carrier- the old Ghana
Airways. Sources say there is a strong possibility the
Acting Director General of GCAA, Nii Badoo, will also be
replaced.


5. (C) Comment Continued: The President's interest in MK
Cargo's license status may mean he would encourage MK to move
faster towards certification. Coupled with his comments
about GIA's ownership structure, however, it might also
indicate a souring of relations with the American investors
who stand to lose all or part of the USD 55 million in
investment capital they have raised if news of Ghana's
downgrade is publicized (ref A). End Comment.
YATES