Finally AMCON takes over distressed Arik Air
Rising debt profile capable of translating to compromise of safety standards has compelled the Asset Management Corporation of Nigeria (AMCON) to takeover hitherto leading indigenous airline, Arik Air on Thursday.
It would be recalled that Arik was set up in 2006, and it boots of about 60 percent share of domestic flights in Nigeria.
Explaining more on the takeover, AMCON spokesman, Jude Nwauzor said it had taken over Arik Air to prevent it from going bust, noting that “the whole place is in a mess.”
“We have appointed a new management to stabilise the airline and prevent it from going down like other airlines in Nigeria.”
Apart from dominating domestic field, Arik serves destinations across West Africa and flies to London, Johannesburg and New York.
According to Nwauzor, Arik had failed to repay loans totalling 135 billion naira ($429 million, 402 million euros) by the end of December last year and also had debts to “a lot of foreign creditors”.
Besides, staff salaries have not been paid for up to eight months and it had defaulted on payments for insurance, repairs and servicing of its planes, it added.
“International creditors have seized some of its planes because of mounting debts,” said Nwauzor.
Analysts say for a long time, passengers have borne the brunt of the increasing management and financial problems at Arik, with frequent cancellations and delays to services.
Just in January, some aggrieved passengers beat up an Arik staff at Lagos international airport following the third consecutive cancellation of their flight to South Africa.
Before the end of last month, Arik was accused by trade unions in the sector of reneging on understanding sealed on staff welfare which the airline denied saying it has not failed in any part of the deal.