Before Arik Air finally collapses under AMCON

Three years ago, the country’s aviation sector was thrown into anxiety when the then strongest domestic airline, Arik Air was taken over by the federal government’s Asset Management Company of Nigeria (AMCON) following the accumulation of huge debt put at N300 billion.

AMCON while announcing the appointment of Captain Roy Ilegbodu, a veteran aviation expert, to run Arik Air under the receivership of Mr Oluseye Opasanya, a Nigerian lawyer, had attributed its takeover of the airline to its heavy indebtedness which had threatened the existence of the then biggest and widest  airline in Nigeria and even in West Africa.

Prior to the coming of AMCON, Arik Air brought great relief to the air traveling public as it was responsible for over 55 per cent of the load traffic operating into major parts of the country even as it made waves on the regional and the intercontinental routes.

There came the bang when the once vibrant and pride of the country started having issues with its financiers, the passengers and other business partners including the ground handlers and the oil marketers.

Swimming in this myriad of turbulence, the poor ownership structure and the bad corporate governance coupled with the use of wrong equipment on wrong routes and other accumulated internal crises contributed to dragging the fortunes of the once vibrant airline down.

At this point, it was not that surprising to many when AMCON stepped in with many heaving a sigh of relief that ‘a messiah has come’ to rescue the airline which was at times fighting to remain afloat even as its hitherto passengers had ported to other airlines due to disappointment.

Hope became very high when AMCON declared that the takeover of Arik Air was to prevent what it called a major catastrophe and to protect as well as preserve the airline’s business as corroborated by the Minister of Aviation, Senator Hadi Sirika who declared: “We believe that this appointment is timely and will stabilise the operations of the airline.”

Three years after the takeover of the airline, rather than things improving, the situation is getting messier as more troubles rear their head with the airline getting more overwhelmed.

The hitherto challenges bedeviling the airline have become worsened with the outbreak of COVID-19 and its devastating effects on aviation and airline business in particular which forced the airline to recently retrech 300 of its workforce due to the negative impact of the pandemic.

Even before the outbreak of the pandemic, despite the presence of AMCON, not much success was recorded in areas like routes expansion and fleet build up which has led to many questioning the competency of the government organ.

Information gathered has shown that the number of aircraft in the fleet of the airline has greatly reduced to four as against the original 10 AMCON met in 2017.

Presently, the general notion across the sector is that the airline needs another rescuer to rescue it from AMCON in view of the challenges confronting it which if not urgently tackled may nail the coffin of the once healthy domestic airline.

The latest sack of 300 of its workers may spell doom for the airline as it needs to package and pay the entitlements of the affected staff or face the wrath of the aviation unions.

To say all is not well with the airline under the management of AMCON may not be an exaggeration as confirmed by the recent alarm raised by a group of local investors that their investment in Arik Air was going down the drain since AMCON took over the airline.

Lamenting how investments in the airline by foreign partners had ceased since the AMCON takeover, the local investors who described the takeover of the airline as illegal, appealed to the government to return the airline to them before it totally collapses under AMCON.

While the argument of the local investors may not be tight, one obvious thing is that the takeover of Arik Air by AMCON has not really convinced the majority of the public that the takeover was worth the while as witnessed in the ongoing confusion and mess the airline has been enmeshed in.

The hitherto great confidence reposed in AMCON when it took over by many key players have drastically reduced on the premise that the airline has further nosedived from the troubled spot it was before it was taken over by the government organ which has rubbished the idea.

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