AMCON’s Lifeline Stabilises Arik Air
Asset Management Corporation of Nigeria’s intervention with a fresh fund of N1.5 billion, has given a strong lifeline to Arik Air, as the company is currently back to operational stability.
According to the Chief Executive Officer of Arik Air, Capt. Roy Ilegbodu, who spoke to journalists yesterday, the takeover of Arik Air by AMCON was timely, as the company was heading to collapse.
Ilegbodu traced the problems of the country’s largest carrier to huge non-performing loans, accumulated workers’ salary arrears, lack of spare parts for aircraft servicing, high level balkanisation of existing aircraft and declining customer confidence due to cancellations of flights, adding that a major pillar of aviation business, which is trust, was violated severely, both to the creditors and passengers.
According to him, the level of rot in the company was exposed by the ongoing audit, which also is revealing deep seated mismanagement of operations, particularly the balkanisation of aircraft.
On the strategy to turn around the ailing carrier, he said the plan from the beginning was to slow down operations to ascertain safety and control of operations, as any slight mix up at that point would damage the whole system beyond rescue.
Ilegbodu said that the management of the company has ensure stability of the airline within a short period, informing that about six more aircraft will be added to the current eight by the middle of this month.
He, however, said that there is still much work to be done to get the airline fully back to stability, as debt restructuring for local and foreign creditors are ongoing, adding that there is the huge backlog of refund to customers, put at between N60 million and N75 million weekly, which he said has become a drain on the company’s operations.
Ilegbodu noted that his management, while paying the current salaries of workers, also took up the salary arrears, to ensure that everyone meaningfully contributes to the recovery process of the company.
Reacting to the recent news about investors’ interest in the airline, he said that nothing is wrong as local and foreign investments would be welcome.
Nigeria has the potential to attract and dominate aviation business in the continent, as there is a big population and a growing middle class, he said.
“Investment is actually what we need now, whether from local or foreign investor. The business is capital intensive, so I am not opposed to any interests in the airline”, he said.
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