AMCON says Arik Air owing ‘more than N300bn’

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The Asset Management Corporation of Nigeria (AMCON) says Arik Airline’s debt is more than N300bn and that a large part of it is taxpayers’ funds.

The corporation announced its takeover of the management of the airline, which is Nigeria’s largest carrier, in a statement on Thursday.

According to AMCON, the airline will now be managed by Roy Ilegbodu, under the receivership of Oluseye Opasanya (SAN).

The corporation said it took over Arik’s non-performing loans – running into billions of naira – a few years ago, in exchange for a stake in the airline.

A breakdown of the statement by the digital media office of the presidency listed the “issues” surrounding the intervention as:

  • Arik Air is on the verge of collapse. On Wednesday February 8, 2017, Arik temporarily suspended flight operations to John F Kennedy International Airport, New York, United States.
  • Arik’s total debt profile: more than 300 billion naira — a large part of this is taxpayers’ funds in the form of bailouts. Arik constantly defaults in its lease payments and insurance, resulting in the regular confiscation of aircraft by lessors.
  • Arik currently has more than eight aircraft grounded for various reasons. This is one of the reasons for the flight delays and cancellations regularly suffered by customers.
  • Arik is owing staff salaries for several months. It has also been failing to remit tax deductions from workers’ salaries.
  • Arik habitually flouts regulators’ directives.
  • Arik is perpetually bickering with Aviation Unions including the National Union of Air Transport Employees (NUATE), the Air Transport Senior Staff Services Association of Nigeria (ATSSSAN) and the National Association of Aircraft Pilots and Engineers (NAAPE).
  • In summary, Arik Air is on the verge of collapse. On Wednesday February 8, 2017, Arik temporarily suspended flight operations to John F. Kennedy International Airport, New York, United States.
  • Arik’s total debt profile: more than 300 billion naira — a large part of this is taxpayers’ funds in the form of bailouts.

Another reason for the intervention is “to enable Arik return to regular, undisrupted operations; to avoid job losses; to protect investors and stakeholder funds; to rebuild the credibility of the Airline and its brand; to ensure sure safety and stability in Nigeria’s already challenged aviation sector”.

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Source: The Cable
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