AMCON takes over Arik Air, appoints MD, receiver manager

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The Asset Management Company of Nigeria (AMCON) has taken over the management of Arik Air that has been struggling with huge debts totalling N139 billion.

AMCON said in a statement issued yesterday in Lagos that it had appointed Capt. Roy Ukpebo Ilegbodu as the managing director under the receivership of Mr. Seyi Opasanya (SAN).

It said 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.

“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,” it added.

Meanwhile, the minister of state for aviation, Senator Hadi Sirika described the intervention as “timely” adding it “will stabilize the operations of the airline.”

“This will enhance the long term economic value of Arik Air and revitalize the airline’s ailing operations as well as sustain safety standards, in view of Arik Air’s pivotal role in the Nigerian aviation sector,” he said.

The minister pledged the support of the ministry of aviation to the new management of the airline.

“All necessary steps have been taken to ensure that there would be no undue disruption in Arik’s regular business operations or activities of other stakeholders on account of the recent changes in the leadership and management of Arik Airline.

Similarly, Capt. Ilegbodu, under the receivership of Opasanya, has also assured both staff of the troubled airline and all other stakeholders that his appointment would among other objectives enhance the airline’s value, improve customer experience, and sustain the safety, reliable and secure operational history of the airline before all those were eroded.

Arik Air had 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, the airline temporarily suspended its service to the John F. Kennedy International Airport, New York, claiming that the two Airbus A330-200 aircraft dedicated to the route had 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 aircrafts 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 Christmas season, passengers were stranded in airports all over the country due to the airline’s incessant flight delays and cancellations, which negatively affected the preference they enjoy from passengers.

The airline is so overwhelmed to the extent that the worker’s 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 the airline’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 travelers and an embarrassment to the aviation sector in the country.

Besides owing workers’ salaries, the airline has not been remitting the taxes of workers to relevant bodies thus also defrauding the country.

The carrier is also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing repossession of its aircraft by lessors.

 

 

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