AMCON takes over management of Arik, Nigeria’s biggest airline

Arik Air
Arik Air

New managers were yesterday appointed for Arik Air to save the airline from a debilitating financial turbulence.

The Asset Management Company of Nigeria (AMCON) took over the management of Nigeria’s biggest airline.

But the airline rejected the takeover and vowed to challenge it in court.

AMCON, according to a statement, appointed Captain Roy Ukpebo Ilegbodu as the managing director and Mr Seyi Opasanya (SAN) as the receiver.

The takeover, according to AMCON, clearly underscores the government’s decision to instil sanity in the aviation sector and also to preserve Arik as a going concern.

Security was heavy at the airline’s head office.

The AMCON statement reads: “From all indications, respite may have come the way of Arik Airlines currently immersed in heavy financial debt burden that is threatening to permanently ground the airline.

“For some time now, the airline, which carries about 55 per cent of the load in the country, has been going through difficult times that are 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.

“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.”

AMCON said the development would afford Arik, 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.

The statement reads: “ The airline would now be managed by Capt. Roy Ukpebo Ilegbodu, a veretan aviation expert under the receivership of Mr. Oluseye Opasanya, SAN.”

Explaining the rationale for the intervention Minister of State for Aviation Hadi Siriki said: “We believe that this appointment is timely and will stabilize the operations of the airline.”

This, he said, 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, who said the Ministry of Aviation would support the management of the strategic carrier, added that all steps had been taken to ensure that there would be no undue disruption of Arik’s operations or activities of other stakeholders, on account of the changes.

Capt. Ilegbodu, under the receivership of Opasanya, SAN has also assured the staff of the troubled airline and all other stakeholders that his appointment would, among other objectives, enhance the value of Arik, improve customer experience, and sustain the safety, reliable and secure operational history of the airline.

“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 require 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 had been taken to France for C checks.

More than eight aircraft are grounded, making it difficult for the airline to make routine commercial flights.

The statement reads :” 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 etc.

“During the last Yuletide season, passengers were stranded in airports all over the country due to Arik’s incessant flight delays and cancellations, which negatively affected the preference they enjoy from passengers. You are all living examples of this.

“The airline is so overwhelmed to the extent that the workers’ 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 travellers and an embarrassment to the aviation sector.

“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 aircraft by Lessors. Various class actions are pending against the airline all over the world.

“We assure all stakeholders that the intervention is in the best interest of the general public, workers, creditors and other aviation interest groups.”

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