Quick Read: The AMCON Intervention in Arik Air
Arik is the largest local carrier in Nigeria, accounting for about 55% of passenger load.
The Intervening Agency:
AMCON is the Asset Management Corporation of Nigeria, established in 2010 to efficiently resolve the non-performing loan assets of banks in Nigeria. AMCON took over Arik’s non-performing loans — running into tens of billions of naira — a few years ago, in exchange for a stake in the ownership of the Airline.
Dissolution of Management, and Appointment of Receiver-Manager. The Airline will now be managed by Capt. Roy Ukpebo Ilegbodu, under the receivership of Mr. Oluseye Opasanya, SAN.
Arik’s total debt profile: more than 300 billion naira — a large part of this is taxpayers’ funds in the form of AMCON bailouts.
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 aircrafts 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.
Rationale for the Intervention:
· 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.
Key objectives of the new management:
· Stabilize the operations and finances of the Airline
· Improve customer experience
· Sustain safety and reliability
AMCON Website: http://amcon.com.ng/Home.aspx
Link to AMCON Press Release on the Arik Air Intervention: https://www.facebook.com/TheAsoVilla/posts/587282141462519