Goldstar Air’s Impact on Air Transport Liberalization in Africa and Afrik Insurance

Reputable international airline Goldstar Air, the wings of Ghana, is awaiting aircraft inspection to commence operations as an intercontinental airline, aiming to enhance Africa’s Gross Domestic Product (GDP).

The airline has set its sights on the liberalization of air transport in Africa for socioeconomic development by introducing Afrik Allianz and Afrik Insurance to become leading GDP contributors on the continent.

As of 2023, Africa’s GDP was estimated at $3.1 trillion, and the commencement of Afrik Allianz and Insurance operations guarantees economic stabilization for member airline countries.

This initiative stands as a major priority to increase GDP and put Africa on sound footing.

Afrik Allianz is a strategic move to enhance connectivity, streamline operations, offer travelers more options on the African continent, and identify the potential benefits of collaboration, such as cost-sharing, code-sharing, and joint marketing efforts. It aims to develop common standards for ticketing, baggage handling, and passenger services.

Afrik Allianz’s liberalization of air transport in Africa is intended to stimulate increased trade volume, investment, and business activities across the continent, creating massive job opportunities, reducing poverty, and earning foreign exchange.

The alliance will optimize 24/7/365 operational efficiency and reduce costs through resource sharing among members, including lounges, terminal space, ground handling services, marketing programs, maintenance bases, and IT systems. This collaboration ensures consistent service while maintaining financial independence and brand identity, creating millions of job opportunities for African youth.

Afrik Allianz will regularly assess members’ performance, adapt strategies as needed, address challenges promptly, and maintain open communication among members. Success will depend on commitment, trust, and alignment among member airlines.

State-of-the-art infrastructure, such as runways, taxiways, and terminal facilities, is essential for building aviation hubs. African airports must operate 24 hours a day to support flight operations. Accra Airport’s Terminal 2 and 3 walkway transit connectivity facilities are crucial for making Ghana’s capital a 24-hour hub.

Airlines from various countries may have distinct organizational cultures, communication styles, and decision-making processes. Bridging these cultural gaps is essential for effective collaboration. Competing airlines must overcome historical rivalries and find common ground. Trust among Afrik Allianz members is crucial, requiring open collaboration, information sharing, and mutual benefit. Revenue-sharing models and cost-sharing arrangements will be fair and sustainable, balancing contributions from airlines with differing route coverage.

In 2018, the Single African Air Transport Market (SAATM) was launched to fully implement the Yamoussoukro Decision, granting member states greater freedom in each other’s airspace. Despite some opposition, including from the Airline Operators of Nigeria (AON) and Uganda President Yoweri Museveni, the initiative aimed to foster regional airline formation and air liberalization.

Goldstar Air aims to be among Africa’s top 100 companies, emphasizing great company culture and customer service, and has prioritized launching Afrik Allianz and Insurance. According to Eric Bannerman, Chairman and CEO of Goldstar Air, Afrik Allianz members will create and sell points on their frequent flyer programs, collaborating with banks and credit card companies to generate revenue. This setup is expected to make Afrik Allianz’s loyalty programs highly lucrative, as consumers are increasingly charged, nearly one percent of the U.S. GDP, for airline credit card points alone.

Afrik Allianz will optimize cargo operations through collaboration, data-driven insights, customer-centric approaches, and continuous improvement. The alliance’s success will depend on adaptability, trust, and a commitment to shared objectives, learning from past failures to shape stronger partnerships in the aviation industry.

Goldstar Air is negotiating with Afrik Allianz members to establish an insurance department, Afrik Insurance, starting with coverage for aircraft flying within Africa and later expanding to other continents. Aviation insurance will cover life risks for owners, operators, pilots, renters, students, and flight schools. Afrik Insurance will provide financial guarantees for purchasing additional aircraft for members, maintaining legal ownership of the assets.

Afrik Allianz premiums will be received in installments, with prepayment assumptions adjusted based on changes in expected prepayments and the risk-free rate. Revenue-sharing agreements within Afrik Allianz will involve complex discussions to balance cooperation, competition, and efficient revenue management, creating a win-win situation for all members.

The global aircraft insurance market size was valued at $15.65 billion in 2023 and is expected to reach $20.34 billion by 2032, growing at a CAGR of 2.96% over the forecast period. General aviation market capacity increased during 2022 and into 2023, driven by new and existing insurers seeking to maintain or capture market share.

Chairman and CEO of Goldstar Air, Eric Bannerman, and former Liberia Minister of Transport, Samuel Wlue, and other officials from Liberia government and Goldstar Air after the cabinet approval and signing of a management agreement for Lone Star Air in Monrovia, Liberia. Mr. Bannerman emphasized that Afrik Allianz and Insurance are designed to facilitate intra-regional trade and integration through the movement of goods, services, and people across Africa and beyond. With over 121 airports in Africa and connections to other continents, the alliance aims to foster multimodal transportation and connectivity. According to Airports Council International (ACI) World, passenger traffic in Africa is expected to reach 261 million by 2025.

This initiative presents an opportunity for member countries to sustain easy movements across the continent. However, the absence of transit facilities at some African airports hinders aviation progress. To benefit from the West Africa hub, countries must include transit facilities and adopt new immigration policies that recognize transit passengers.

Goldstar Air envisions operating over 100 aircraft and generating sustainable job opportunities for Ghanaians, connecting African businesses and capitalizing on the opportunities presented by the African Continental Free Trade Area (AfCFTA). This agreement creates the largest free market in the world, connecting 1.3 billion people from 55 countries with a total GDP of $3.4 trillion, offering room for more aviation hubs to support the movement of people and goods.

The African Continental Free Trade Area Agreement can be a game-changer by leveraging Afrik Allianz’s role in Africa’s economic diversification and inclusion. This initiative offers member countries the opportunity to participate and ensure easy movement within Africa.

According to the United Nations World Tourism Organization (UNWTO), over 960 million tourists traveled internationally in 2022, doubling 2021’s numbers. The International Air Transport Association (IATA) reported that airlines carried 3.4 billion passengers in 2022 compared to 2.2 billion in 2021. Africa received 46.6 million international tourists, generating $31.6 billion.

African airlines carried 67 million passengers in 2022, a 55.8% growth compared to the previous year. The continent’s average passenger load factor was 71.6%, 10.6% higher than in 2021, but still 7% below the global average. The mismatch between capacity and demand and limited commercial cooperation between local carriers may explain this lower performance in Africa. The recovery is expected to continue, with African airlines’ passenger numbers estimated to reach 85 million in 2023. Afrik Allianz’s introduction is expected to significantly boost these numbers.

Afrik Allianz will continuously evaluate all processes, from ground handling to in-flight services, to identify areas where costs can be reduced without compromising safety or quality. The alliance will invest in fuel-efficient aircraft, optimize flight routes, implement fuel-saving practices, adjust ticket prices based on demand, and maintain a highly skilled workforce capable of handling complex maintenance tasks.

Goldstar Air marks Labor Day on September 2, 2024, honoring the hard-working employees who have been dedicated to creating job opportunities for generations to come. Better times are ahead.