The Asset Management Corporation of Nigeria (AMCON) yesterday February 9, 2017 took over the management of the embattled Arik Airline over N135 billion debt owed the Corporation, Business Day gathered last night.
The corporation which equally announced the appointment of Roy Ilegbodu, a veteran aviation expert to take over the management of the airline under the receivership of Oluseye Opasanya, a senior advocate of Nigeria said its action was to save the country’s aviation industry from total collapse.
Industry analysts say last night that relief may have come the way of the embattled Arik Airline which is currently immersed in heavy financial debt burden that is threatening to permanently ground it.
The Arik Airline has been in a precarious situation largely attributable to its heavy financial debt burden, bad corporate governance, erratic operational challenges and other issues, that require immediate intervention in order to guarantee the continued survival of the Airline.
For instance, out of the 25 aircraft in its fleet, about eight has been grounded while two has been abroad for the regular checks.
Arik Air recently suspended its flight operations to the John F. Kennedy International Airport, New York, United States as the the two Airbus A330-200 aircraft dedicated to the route have been taken to France for C check, which is an extensive visual inspection of specified areas, components and systems as well as operational and functional checks of an aircraft for maintence purpose.
Besides owing workers’ salaries, the Airline has also not been remitting the taxes of workers to relevant bodies thus also defrauding the country. The Airline is also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing repossession of its aircrafts by Lessors.
For some time now, the biggest indigenous airline, with an estimated 55% market share of the load in the country, has been going through difficult times that are attributable to its bad corporate governance, erratic operational challenges.
The airline is so overwhelmed to the extent that the worker’s wages are not paid for several months, leading to occasional confrontation between the management of Arik and different Aviation Unions in the country.
It was Arik’s inability to pay its workers for seven months that forced the United Labour Congress (ULC) and Engineers Union to recently shut the offices of the Airline across the country causing untold hardship to thousands of travelers and an embarrassment to the aviation sector in the country.
The myriad of issues confronting Arik Air of late ranges from confiscation of aircrafts due to non-payment of leases, frequent flight delays, constant fracas between Arik Staff and irate passengers at both local and international airports.
Jude Nwauzor, head, Corporate Communications Department of the corporation said last night that the move was aimed at instilling sanity and confidence into the sector.
Nwauzor further that the action will afford Arik Airlines, which is the largest local carrier to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholder funds as well as ensure safety and stability in the already challenged aviation sector.
Explaining the rationale for the latest intervention in Arik Airlines, the Minister of State for Aviation, Hadi Siriki, a Senator said, “We believe that this appointment is timely and will stabilize the operations of the airline. This will enhance the long term economic value of Arik Air and revitalize the airline’s ailing operations as well as sustain safety standards, in view of Arik Air’s pivotal role in the Nigerian aviation sector.”
The Aviation Minister further pledged that the Federal Ministry of Aviation would support the new management of the strategic carrier added that all necessary steps have been taken to ensure that there would be no undue disruption on Arik’s regular business operations or activities of other stakeholders, on account of the recent changes in the leadership and management of Arik Airline.