- Court Refuses EFCC Evidence In Arik Air N76bn Aircraft, Property Sales Case
- Kenya Airways mulls return to Abuja, weighs options
- Developing Nigeria’s aviation local content policy with ‘Fly Nigeria Act’
- Qatar Airways Launches Additional Flights to Global Destinations
- NSIB, Aero sign strategic aviation deal
Arik hires KPMG to conduct forensic audit on airline
*To submit report in 12 weeks
Wole Shadare
The new management of Arik Airlines has appointed KPMG, world-class financial experts to undertake a forensic and diagnostic audit of the finances of the airline to ascertain the true status of its finances.
According to the statement, the review will among other objectives cover the position of assets and liabilities, and their utilization; recording and utilization of loans, propriety of third party transactions; fraud controls over Procure to Pay (‘PtP’), Agents and Business Partners and Financial Reporting and Arik Airline’s financial position as at January 31, 2017. The report is expected to be delivered within 12 weeks.
“We have hired KPMG to look into the financials of Arik with a tooth comb and advise us with verifiable facts on what went wrong with the airline. We need to do that because the outcome will help us plug the loopholes and stabilise the airline,” the statement added. The whole intention is to identify what went wrong with Arik to enable the new management to bring it back to full operations.
The federal government intervened last Thursday February 9, 2017 in the airline following daunting complaints of huge indebtedness of the airline to various creditors and the frequent interruptions in its operations, and the concern to safety and security
Managing Director of the airline, Capt. Roy Ukpebo Ilegbodu stated that the Assets Management Corporation of Nigeria (AMCON) has discovered deep rooted rot at Arik Airlines, saying over N10 billion to fix rot before the largest local carrier would resume full and uninterrupted flight operations to its regular routes across the country and beyond.
The airline was on Thursday taken over by the Federal Government under the auspices of AMCON as a result of a whooping debt profile of over N300billion.
He said the situation is so bad that only nine aircrafts out of the 30 in the fleet of the airlines is operational, stressing that 21 of them have either been grounded, gone for C-check in Europe among other forms of challenges.
As if these problems are not enough, he disclosed that the airline does not have money to procure aviation fuel for the nine operational aircraft because no dealer wants to sell aviation fuel to Arik if it is not on cash-and-carry basis.
He called for public understanding because flight schedules may be re-aligned based on the nine aircraft that are available, technically sound and ready for flight operation.
His words, “It was also discovered that Arik also owe its technical partners and also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing squabbles with different business partners, which accounts for why 21 aircraft is off the fleet for different reasons.”
“All these problems in addition to huge staff salaries, which have remained unpaid for 11 months; vendors that supply different items to Arik Airlines that are also owed meant that Nigerians may have to tarry-a-while to allow the new management clean up the huge mess at the airline before Arik would finally resume uninterrupted flight.”
Google+