The Asset Management Corporation of Nigeria (AMCON) yesterday took over the executive control of Arik Air to save the carrier from collapse due to its heavy financial debt burden.
The airline will now be managed by Capt. Roy Ukpebo Ilegbodu, a veteran aviation expert with more than 30 years experience, under the receivership of Mr. Oluseye Opasanya (SAN).
With the takeover by independent management under AMCON, owned by the Federal Government, the airline stands a chance of not going under, but to rebound and give efficient services to passengers and meet its financial obligations, including paying workers’ salaries.
Industry watchers had seen the development coming, but rather than a complete takeover, the debts’ purchasing company preferred the option of a management takeover, having considered the security, safety and attendant loss of revenue and hundreds of jobs by workers, service providers, contractors, suppliers and others.
The change in management came after the Economic and Financial Crimes Commission (EFCC) invaded the headquarters and quizzed the Chairman, Sir Michael Arumemi-Ikhide, for several hours over alleged misappropriation of N135 billion.
Rationalising the management takeover, a high-ranking source at AMCON confided in The Guardian on the telephone yesterday that “the issue with Arik goes beyond wanting to recover debts owed.”
According to the source, “Even if AMCON wants to recover the N135 billion, under the current economic crisis, how much will it realise from selling the aircraft? They’ve gone from 28 aircraft to just 10 in the fleet.”
The source said further: “N135 billion is just debts owed to AMCON. What about the $20million owed foreign partners for services or the N100million to renew its insurance?
“Besides, it has not been able to pay salaries for about seven months and everyday their passengers are stranded at all the airports where they operate. So we are trying to save them from collapse, not kill them as AMCON is often accused of.
“In fact, it is in everybody’s interest – the government, the airline and the passengers– that it continues to operate. There is no way government can allow Arik, Nigeria’s biggest airline and the only one flying the international routes, to go under.”
“The new management will examine the fundamental problems of the airline and will remain until the airline stabilises and able to meet its domestic and external obligations to all stakeholders,” the source added.
Arik Air, which is reputed as West and Central Africa’s largest carrier, was accused of bad corporate governance; erratic operations; inability to pay staff salaries; delay in renewal of aircraft insurance, and heavy debt burden to fuel marketers and aviation ancillary services, among others.
The airline has refused to comment on the development or the allegations against it, as calls and text messages to the spokesman, Banji Ola, remain unanswered.
Speaking on the AMCON’s latest intervention in Arik Air for the second time, the Minister of State for Aviation, Hadi Sirika, said the development was timely and would stabilise the operations of the airline.
“This will enhance the long-term economic value of Arik Air and revitalise 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 minister pledged the Aviation Ministry’s support for the new management of the strategic carrier, adding that all necessary steps had been taken to ensure that there would be no undue disruption of Arik’s regular business operations or activities of other stakeholders on account of the change in the leadership.
Meanwhile, aviation stakeholders have expressed mixed feelings over the change in leadership. While some commended the action as long overdue, others expressed concerns over AMCON’s ability to manage the airline to safety.
On Wednesday, Arik suspended its flight operations to the John F. Kennedy International Airport, New York, United States, claiming that the two Airbus A330-200 aircraft dedicated to the route had been taken to France for C check at the same time.
Also, more than eight aircraft are currently grounded at the tarmac making it difficult to meet their routine commercial flights.
During the last Yuletide season, passengers were stranded at airports all over the country due to Arik’s incessant flight delays and cancellations, which negatively affected the preference they enjoy from passengers.
The Head of Corporate Communications Department of AMCON, Jude Nwauzor, said that the move, which clearly underscores government’s decision to instill sanity in the nation’s aviation sector, has also prevented a major catastrophe that would, among other factors, protect and preserve Arik Airlines as a going concern.
“The development 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.”
Ilegbodu, under the receivership of Opasanya, has also assured both staff of the troubled airline and all other stakeholders that his appointment at Arik would among other objectives enhance the value of Arik, improve customer experience, sustain the safety, and reliable and secure operational history of the airline before all those were eroded.
But a doyen of the aviation industry, Capt. Dele Ore, said the development was unfortunate, noting that AMCON is strictly for financial institutions and not cut out for managing an airline.
Ore expressed the fear that his friends and colleagues would be at risk of losing their jobs, if the airline manages to recover as AMCON has promised.
The Secretary General of the Association of Nigerian Aviation Professionals (ANAP), Abdulrasak Saidu, said Arik emerged from the remains of Nigeria Airways, “bought over by the owners, without paying a dime to the government.”