Two Years After, AMCON Yet to Get Buyer for Arik

Chinedu Eze

Almost two years after Arik Air was taken over by the Asset Management Corporation of Nigeria (AMCON) on February 9, 2017 and put up for sale, no investor has indicated interest to acquire the airline, which was then the
biggest domestic operator in the country, THISDAY’s investigation has revealed.

THISDAY has also gathered that there are strong indications that the team AMCON set up to manage the airline may find it increasingly difficult to sustain the operations of the airline going forward.

Reliable sources in both the AMCON and the airline told THISDAY that substantial revenue generated by the airline was allegedly being spent on foreign trips of the management personnel, emoluments, other allowances, as well as other recurrent expenditure.

One of the sources who pleaded to remain anonymous added, “The airline is in a very bad state. There is no operating fund and there is too much vetting to the extent that it is difficult to buy spares and other consumables.

“The frequency of overseas trips and courses is high. When an airline is in such financial straits, you only attend the courses that are compulsory. The airline has only three operating aircraft.”
A source at Arik Air told THISDAY that the only hope the airline has now is its acquisition by investors, otherwise it would go under.
The source noted that out of 26 aircraft inherited by AMCON, the team appointed to manage the airline has not been able to put more than eight aircraft on service at any point in time.

According to the source, some aircraft are at maintenance facilities overseas, while others are at the Arik Air hangar at the domestic wing of the Murtala Muhammed International Airport (MMIA) in Lagos.

THISDAY also learnt that out of the four Bombardier CRJ 900 owned by the airline, none was operating.

It was also gathered that only two out of four Bombardier Q400 are in service, while out of eight Boeing B737-700 and four Boeing B737-800 only one was operating.
So, overall, the airline has three operating aircraft out of 26 in the fleet when it was taken over by AMCON two years ago.

AMCON-appointed management was to manage the airline for one year, but the period was extended to two years, which expires on February 9, 2019, but still the fortunes of the airline instead of growing, have been shrinking in terms of the number of aircraft on its fleet.

An official of the airline, who did not want his name on print, told THISDAY, “The airline is on its way out. Last week we had two Boeing aircraft in operation, one broke down and we took one to Owerri but it also broke down. They were able to put the two aircraft back into service. As at today, we have one Boeing aircraft and two Bombardier, Q400.

“However, the management does not owe us; it pays promptly but the place is being run like a government agency. There is a lot of complacency; so, many people have resigned and there is fear that the company can go
under at any time.”

When contacted, spokesman of AMCON, Mr. Jude Nwauzor, told THISDAY that the sale of the airline along with Aero Contractors was an ongoing process, saying they had been handed over to a Transaction Adviser who is
expected to make recommendations to the corporation.
“The offload of Arik Air and Aero Contractors is an ongoing process. We depend on what the Transaction Adviser tells us.
“Any portfolios we divest from we hand it over to Transaction Advisers and depend on them for directives,” he said.

Also, Head of Communications of Arik Air, Mr. Adebanjo Ola, who admitted to THISDAY that the future of the airline could be threatened, said the current management of the airline is not meant to be there forever.
He said that Arik Air exists today and maintained existing workforce was because of the intervention by AMCON.
He said if AMCON did not take over the airline when it did, it would have gone under in 2017.

The Arik Air spokesman commended the Managing Director of the airline, Captain Roy Ilogbodu, whom he said has made prudent management of the resources of the carrier to sustain its operations so far.
Another official of the airline also dismissed the allegation that the airline could be sold “through the backdoor”, noting that without the consent and approval of the owner, Sir Joseph Arumemi-Ikhide, the airline cannot be sold.

Investment and aviation lawyer, Mr. Emeka Nwigwe, who has been monitoring Arik Air since it was taken over, told THISDAY that the aviation sector in Nigeria does not hold any promise in terms of financial returns and noted that AMCON could sell Arik Air’s assets but not Arik as an airline because the shares of the company are not with AMCON.