Trouble Persists As AMCON Takes Over Arik Air

February 10, 2017 9News Nigeria Aviation News, Business, Hot News, Nigerian economy 0

…We’ll challenge govt action in Court –Airline

By Loius Ibah

Mixed reactions have continued to trail yesterday’s takeover of Arik Air by the Assets Management Corporation of Nigeria (AMCON). While most stakeholders applauded the decision as a timely intervention that could resuscitate the ailing airline, some were cynical of AMCON’s ability to effectively run an airline as evident in a similar takeover of Aero Contractors.

Recall that AMCON) announced that it was taking over the management of the airline Thursday after sacking its entire management team and replaced them with new ones. Arik Air is currently indebted to AMCON to the tune of N135 billion and has been struggling to service the debt. But the airline vowed on Thursday that it would challenge the takeover in court.

Capt. Ado Sanusi, its Senior Vice President, stated this at a joint news briefing with the newly appointed receiver Manager, Mr Oluseye Opasanya (SAN) and the airline’s technical consultant, Capt. Roy Ilegbodu.

AMCON had earlier said in a statement that “the airline would now be managed by Captain Roy Ukpebo Ilegbodu, a veteran aviation expert under the receivership of Mr. Oluseye Opasanya.

“We believe that this appointment is timely and will stabilise the operations of the airline,” said Minister of State for Aviation, Senator Hadi Sirika, in his reaction.

“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,” Sirika added.  The Minister who further pledged that the Federal Ministry of Aviation would support the new management of the carrier, adding that all necessary steps have been taken to ensure that there would be no undue disruption on regular business operations or activities of other stakeholders.

Commenting on the development,  a renowned aviation analyst, Chris Aligbe, expressed sadness over the turn of events. According to him, Arik Air carried the hopes and aspirations of Nigerians, ‘and for this airline to go down to a level where AMCON has to take it over, despite all the new equipment (aircraft) that they had in their fleet, tells a very sad story of the industry; I am very sad” he said. Aligbe was, however, cynical about the fate of the airline under AMCON receivership, saying AMCON is not an airline management company. ìAnd I don’t think they have what it takes to run an airline. I just hope Arik Air does not go the way of other Nigerian airlines that had a major financial crisis like this and never came back,” Aligbe added. Another aviation analyst, Capt. John Ojikutu, however, said he saw the take-over coming. “For me it is long expected because since early 2015, we knew that the government should have evaluated the debts of Arik and Aero. ìTheir access to aviation intervention funds and evaluate this against their assets,” said Ojikutu.

“Where balance of debts is greater than their assets, government should use their fleet to establish the planned national carrier,” he advocated.

A Manager of Zenith Travels Agency, Mr. Olumide Ohunayo, said “the airline must not be allowed to go down considering its size and influence on air travel within Nigeria. Maybe the national carrier riddle has just been resolved with AMCON takeover of Arik Air,” he added.

Meanwhile, the Chairman of Arik Air, Sir Joseph Arumemi-Ikhide, was on Wednesday quizzed by some operatives of the Economic and Financial Crimes Commission (EFCC) over allegation of some financial impropriety in the airline.

The airline had initially denied the visit earlier in the day, describing it as rumours.

However, at about Thursday noon, the Spokesman for the airline, Mr. Banji Ola, in a statement eventually acknowledged the visit of EFCC to the airline office.

“Operatives of the Economic and Financial Crimes Commission (EFCC) on Wednesday, February 8 , 2017 visited Arik Airís head office at the Murtala Muhammad Airport , Lagos, and held a brief meeting with Chairman of Arik Air, Sir Joseph Arumemi-Ikhide after which the Chairman visited their Ikoyi, Lagos office for further discussions and to respond to their enquiries,” Ola said. “Having satisfactorily answered the query, the Chairman later left the EFCC office,” he added.

Ola, however, declined to give reasons for the EFCC visit. The airline is currently indebted to some Nigerian banks. It was learnt that the EFCC visit might not be unconnected with several financial transactions between the airline and its creditors,

As a matter of fact, 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 required immediate intervention in order to guarantee the continued survival of the airline.

Yesterday, Arik temporarily 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 have been taken to France for C-check at the same time. Equally, more than eight aircraft are currently grounded at the tarmac making it difficult to meet their routine commercial flights.†

The myriad of issues confronting Arik Air of late ranges from confiscation of aircraft due to non-payment of leases, frequent flight delays, constant fracas between Arik staff and irate passengers at both local and international airports, among others.

During the last yuletide season, passengers were stranded in airports all over the country due to Arikís incessant flight delays and cancellations, which negatively affected the preference they enjoy from passengers. †

The airline was so overwhelmed to the extent that workers’ wages were not paid for several months, leading to occasional confrontation between the management and different aviation unions in the country. It was Arikís 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 travellers and an embarrassment to the aviation sector in the country.

Beside owing workersí salaries, the airline also has not been remitting the taxes of workers to relevant bodies, thus also defrauding the country. It is also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing repossession of its aircraft by lessors. Various class actions are pending against the airline all over the world.

Sourcce: Sun

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