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Arik debts profile in excess of N300B, fleet size shrinks to ten
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Within 48 hours of intervention by the government, Arik Air is receiving assistance to be able to offer smooth flight services.
A source close to the carrier and the Assets Management Corporation of Nigeria (AMCON) told Woleshadare.net that contrary to what was previously recorded, Arik have debts in huge amounts, in excess of N300 billion, especially with some banks, excluding fuel suppliers, lessors and maintenance companies.
Sources say following it’s intervention Thursday,virtually all of Arik’s trade creditors are being owed, staff salaries have not been paid for between 4- 6 months, and of the 28 aircraft in Arik’s fleet, only 10 are in operation.
Due to government’s intervention, operations are continuing and the insurance cover for the aircraft which would have expired on Sunday, 12 February has now been sorted out. Trade creditors and fuel marketers have been assured that all indebtedness will be looked into; they have offered to support the new management to get operations run smoothly.
Previously the fuel suppliers had suspended credit facilities, but the airline is working to ensure steady fuel supply, which had been the cause of the airline’s erratic operations.
Flight schedule may therefore be realigned to match the 10 aircraft in the fleet, while sorting out the myriad of problems confronting the airline.
A source near the airline confirmed that the management is looking to stabilise its operation by scaling down flight operations based on the number of serviceable aircraft at its disposal, until more aircraft return from C-check and maintenance yards abroad. Therefore a new schedule will be announced in the next few days to accommodate its existing fleet of 10 aircraft.
“It is obvious that without Government intervention Arik would have virtually stopped operation by Monday of next week. We need public support to understand the enormity of the challenges here, while we stabilise operations over the next few days, as we offer safe, secure and timely services to customers.
Meanwhile, aviation think tank, Aviation Round Table (ART) yesterday said treating the Arik Air’s case in isolation would be to trivialize the magnitude of the problem, saying they all saw it coming
On Thursday, the Asset Management Corporation of Nigeria (AMCON) took over the carrier. The takeover would help to save over 2,000 jobs as the carrier is seriously ailing.
President ART, Elder Gbenga Olowo said going back to almost 40 years, Government airline Nigeria Airways failed, Pioneer Private airlines Okada, Kabo, etc failed, third generation ADC, Bellview, Chachangi, Sosoliso, etc failed, 4th generation Richard Branson Virgin Nigeria, Air Nigeria, etc failed.
Believe me, given the same Nigeria operating environment the National carrier yet to be born will fail.
We all saw it coming to Arik and may be others more than a year ago. ART Q1 breakfast meeting in 2016 appraised the very poor situation of Nigerian Airlines and rose with unambiguous communique on the way forward.”
He described the cause of problem of Arik as essentially Nigerian business environmental factor, adding that business and government are permanently at variance.
“Cost is permanently higher than Income. Tax overburden and infrastructural deficit erodes revenue steadily. Gazetted policies that will enhance performance are not implemented. Credit is not in the Nigeria business dictionary. Yet Aviation is prone to the minutest situation in the economy ranging from weather to politics, reckless holidays, etc.
“Needless to say that lack of will to do things right by leadership is the undoing of Nigeria and ditto Nigerian Airlines & businesses, he said it is on record that Governor Tunde Fasola delivered in Lagos; but alas!, what has happened to power in two years that he secured federal might?
“That is the real issue. It is a fundamental problem that needed surgical operation.”
AMCON while taking over the airline said the development will also afford the airline, which is the largest local carrier, to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholders’ funds as well as ensure safety and stability in the already challenged aviation sector.
