Nigerian govt takes over distressed Arik Airline, gives lifeline

Nigerian govt takes over distressed Arik Airline, gives lifeline

The Federal Government  has announced the take over of  Arik Airlines
and announced the appointment of a new management in a bid to save the
country’s aviation industry from total collapse.
Under the new arrangement, Roy Ilegbodu, a veteran aviation expert,
has been named to take over the management of the airline under the
receivership of Oluseye Opasanya, a senior advocate of Nigeria.
The Asset Management Corporation of Nigeria, AMCON, in a statement
said the government would give a lifeline to support the
financially-distressed Arik Airlines continue as a going concern in
the aviation industry.
AMCON spokesperson, Jude Nwauzor, said the government’s decision to
intervene clearly underscores a commitment to instill sanity in the
country’ aviation sector to prevent a major catastrophe in the
country.
“The development will afford Arik Airlines, which is the largest local
carrier in the country, 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,” Mr. Nwauzor said.
Arik, which controls about 55 per cent of the country’s passenger
traffic, has for some time faced threat of liquidation as a result of
heavy financial debt burden, weak corporate governance, operational
difficulties, bad management and inability to pay staff regularly.
Apart from backlog of accumulated staff salaries, AMCON said the
airline has the most de motivated workforce in the sector, while being
in constant default in its lease payments and insurance, resulting in
aircraft getting confiscated by lessors.
Besides, the airline has been operating extremely erratic schedules
not good for a strategic carrier, with its flights routinely either
delayed or cancelled without explanations to customers.
Other corporate issues, which have eroded Arik brand reputation
include negligence of operational regulations, luggage pilfering or
outright disappearances, poor corporate governance, and disregard for
safety procedures.
The Minister of State for Aviation, Hadi Sirika, said the government’s
decision to take over the management of Arik Airlines would stabilise
its operations, enhance its long term economic value, revitalise its
ailing operations, and sustain safety standards, in view of its
pivotal role in the Nigerian aviation sector.
The Minister pledged the support of the Federal Ministry of Aviation
for the new management to make Arik remain a strategic carrier, saying
the intervention was in the best interest of the general public,
workers, creditors and other aviation interest groups.
“All necessary steps have been taken to ensure that there would be no
undue disruption on Arik’s regular business operations or activities
of other stakeholders, on account of the recent changes in the
leadership and management of Arik Airline,” the minister said.
Meanwhile, the new management of the airline has assured both the
staff and other interest groups that it would work to add value to its
operations, improve customer experience, and sustain the safety,
reliable and secure operational history it was known.
Prior to the takeover, operatives of the Economic and Financial Crimes
Commission, EFCC, on Wednesday, stormed the head office of the
airline, to meet with its Chairman, Joseph Arumemi-Ikhide.

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Post source : AGENCY REPORT

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