AMCON Rebuffs Plan to Use Aero as National Carrier


Chinedu Eze
The Asset Management Corporation of Nigeria (AMCON) has severally turned down the plan to use Nigeria’s oldest carrier, Aero Contractors national carrier.
Inside sources said that AMCON management turned down the request to use the airline and Arik Air, arguing that the debt overhang in the airlines would not make such start up feasible because the new airline would be laden with debts at inception.

Besides, AMCON said that it was more interested in recouping the whooping funds projected to between N16 to N20 billion expended on Aero to save it from sinking and to sustain its operation.
Recently, the Corporation made its request public that it was seeking for core investors to take over the airline, as it has fully revived it and even funded the development of its maintenance segment of the airline to carry out C-check on Boeing B737 Classics.

Although the President Muhammadu Buhari administration had promised to establish a national carrier, saying that it is one of its cardinal goals in the aviation industry, but only last year, the federal government said that it was not a priority to the present administration.

This was however contrary to the Minister of State, Aviation, Senator Hadi Sirika’s position that the contrary needs a national carrier.
The minister who earlier in the year raised transaction advisers on national carrier and concession of airports, had stated that government would not invest funds in the planned carrier but it would be fully private sector driven.

But as the administration has almost spent two and half years in the saddle, aviation insiders are wondering when the new carrier would be established.
The resistance to the plan to use Aero to establish a national carrier was confirmed by an AMCON insider who said that it has been the disposition of the Director General, Ahmed Kuru that using an airline that is laden with debts is to encumber the new airline.
“That was his disposition when it was muted that Arik Air should be used as national carrier and he has not deviated from that,” the source said.

THISDAY also learnt from industry insiders that AMCON is interested in getting investors that would pay for the money it spent in reviving Aero Contractors.
“AMCON said it won’t give up its shares in Aero for a national carrier. They will lose about N16 to N20 billion, but there are other companies that are interested in buying the airline,” a source told THSDAY.
Some of those interested in acquiring Nigeria’s foremost airline include the original owners of the airline, the Ibru family, which wants to buy controlling shares of the airlines; although it still has some shares in the company.

Others that have also indicated interest in the airline include the Sifax Group which also owns the Skypower Aviation Services Limited (SAHCOL), EAN Aviation, where the former Director-General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren is a major stakeholder.

THISDAY also learnt that Arik Air had indicated interest in the airline as well as two Chinese firms who are looking at making in-road into the Nigerian and West African aviation market.
Inside Aero source said that the value of the airline gained traction after it developed the ability to maintain Boeing B737 Classics to the C-Check level and since then “many organisations are interested in investing in the airline.”

It is projected that Aero Contractors would save Nigerian airlines about N30 billion annually which they spend on aircraft maintenance overseas as the airline would now offer maintenance services to domestic operators up to C-check level.
Aero would offer maintenance services on Boeing B737 classics, which is the major aircraft type operated by many Nigerian airlines and the airline is expected to also rake in revenues from the maintenance session of the company which has already started receiving requests from airlines to conduct maintenance checks for them.
The maintenance facility was approved recently by the Nigeria Civil Aviation Authority (NCAA) and given certification to the airline as Aircraft Maintenance Organisation (AMO) for C-Check on the Boeing B737-300; 400 and 500 Classics.