In order to ensure its
continuous operation since its takeover, the Asset Management Company of Nigeria (AMCON) has injected N1.5
billion in Arik Airline Limited
This development was made
known to Tectono
Business Review by the Chief Executive Officer of Arik Air, Capt. Roy Ilegbodu in Lagos. Ilegbodu
said that the funds injected by AMCON helped in the stabilisation of the
airline’s operations, prevention of its collapse and payment of staff salaries.
According to him, the funds were injected into the company in the first couple of weeks the new management took over the airline and that the management met a lot of refunds when it took over the company. He added that it paid between N60 million and N75 million to customers as a refund on a weekly basis.
Ilegbodu said that the
company had remained in business due to AMCON’s support, adding that the
support helped in sustaining the airline operations in spite of huge debts
incurred before the Federal Government takeover.
He said that AMCON’s
intervention in the airline was timely because the things on grounds showed
that the company would have collapsed in the next couple of weeks or months. Ilegbodu
said that there were no spare parts in the stores to support the airline’s
operations with huge bills left unpaid and people refusing to offer credits to
the company due to a breach of trust.
“When we started
on February 9, we took our time to study what was on ground in Arik andt was
quite interesting and disturbing for an airline with 30 airplanes on its books
with only 10 functional,” he
said.
He said that AMCON’s
intervention helped the company to seek for spare parts, noting that it would
be flying 14 airlines by the middle of this month. The chief executive officer
said that the company was engaging its creditors on the way forward, adding
that the receiver manager was currently in London to discuss with foreign
creditors.
He said KPMG had been
appointed to carry out a proper audit of the books, adding that more
revelations were coming up on daily basis. According to him, the outcome of the
audit will enable the government to decide on the next line of action. “We are all looking forward to the closure of the audit
because it will show the true position of the company,” he said.
He said that the company
slowed down operations by scaling down on international flights, suspended some
of its aircraft to have good control of operations because of huge damage
discovered in Arik.
He said, “Aviation is a business of a many moving parts. Processes in
the industry are very well regulated and guided too. They call it a business of
many moving parts and everything is done systematically. We have managed to
stabilise operations and we have been able to clear the staff salaries. A lot
of expatriates have been paid to date.”
He added that the company
had achieved a level of stability, noting that, passengers’ number had gone up
with the lifting of over 3,000 passengers on April 28. Ilegbodu said that the
company would continue to engage people and manage situations to woo customers
back to the airline.
He, however, assured
customers that things would normalise in the airline in the next couple of
weeks. “As I speak we have achieved a level of
stability and number of customers has gone up. We have stabilised operations,
the airline will survive and there is a potential for the airline to grow,”
he said.
On the challenges affecting
aviation industry, he said that the industry was capital intensive and should
be for a long-term purpose and not short-term. He said that Nigeria had the
potential to produce the highest airline in Africa based on its population but
needed people with the passion, financial muscle and competency.
Ilegbodu listed the
instability in the foreign exchange market as another factor affecting the
industry, adding that strong business plan was imperative to avert an incessant
collapse of airlines.
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