The Asset Management Corporation of Nigeria (AMCON) has discovered deep rooted rot at Arik Airlines, which would require over N10billion to fix before the largest local carrier would resume full and uninterrupted flight operations to its regular routes across the country and beyond. The airline was on Thursday taken over by the Federal Government under the auspices of Asset Management Corporation of Nigeria (AMCON) as a result of a whooping debt profile of over N300billion.
The situation is so bad that only nine aircrafts out of the 30 in the fleet of the airlines is operational. 21 of them have either been grounded, gone for C-check in Europe among other forms of challenges. As if these problems are not enough, the airline does not have money to procure aviation fuel for the nine operational aircrafts because no dealer wants to sale aviation fuel to Arik if it is not on cash-and-carry basis. This also calls for public understanding because flight schedules may be realigned based on the nine aircrafts that are available, technically sound and ready for flight operation.
It was also discovered that Arik also owe its technical partners and also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing squabbles with different business partners, which accounts for why 21 aircrafts is off the fleet for different reasons. All these problems in addition to huge staff salaries, which have remained unpaid for 11 months; vendors that supply different items to Arik Airlines that are also owed meant that Nigerians may have to tarry-a-while to allow the new management clean up the huge mess at the airline before Arik would finally resume uninterrupted flight.
However, the new Chief Executive Officer of Arik Airlines, Capt. Roy Ukpebo Ilegbodu, a veteran aviation expert under the receivership of Mr. Oluseye Opasanya, SAN at the weekend reassured Nigerians that these issues; though daunting, would be gradually resolved to enable Arik Airlines, which carries about 55% of the load in the country recover the 21 aircrafts. According to him, once all the aircrafts are back to the fleet, Arik Airlines would within the shortest possible time regain its pride of place as a leader among the comity of airlines in Nigeria. He reiterated the fact that the intervention at Arik Airlines on February 9, clearly underscores government’s decision to instill sanity in the nation’s aviation sector, adding that the move also prevented a major disaster that would have befallen the airline.
Having settled the insurance cover for the aircrafts, which would have expired on February 12 and met with different trade creditors as well as aggrieved staff, Capt. Ilegbodu therefore called for public understanding as he begins the tough job of ensuring that Arik is returned to full operational capacity within the shortest possible timeframe.
It would be recalled that the Federal Government using the vehicle of AMCON took over the management of Arik Airlines because the airline was seriously immersed in heavy financial debt burden that threatened to permanently ground the airline. Arik’s challenges were attributable to its bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues, which led to the call for authorities in the country to intervene before Arik goes under like many before it. He maintained that the recent intervention was in the best interest of all stakeholders, the general public, workers, creditors and other aviation interest groups in the country.