Chinedu Eze
The Asset Management Corporation of Nigeria (AMCON) said that it is willing to hand over Arik Air and Aero Contractors to their original owners if they offset their indebtedness to the Corporation.
AMCON said that it was with reluctance that it took over the companies in the transport sector because it lacked the core competence to manage them but have to rescue them from going under and also to recover the debts owed it by these organisations.
Managing Director of AMCON, Mr. Ahmed Kuru stated this in Lagos recently and remarked that the Corporation’s role in these airlines was like a rescue mission as it never intended to manage them longer than necessary.
“AMCON’s intervention through the instrumentality of Receiver Management was first to stabilise the operations of the airlines, put them in a position to generate positive cash flow, then resolve their debt situation through either the owners paying the debts or the sale of the companies/underlining assets.
“Specifically, our intervention in Arik and Aero were intended to be value adding and non-destructive. It is noteworthy that the Corporation has adopted a similar approach to the revitalisation of Peugeot Automobile of Nigeria (PAN), which today is back to operation and assembling vehicles for the road transport sector,†he said.
Kuru said that at the point of intervening in Arik, the company was witnessing high spate of flight cancellations of up to 40 per cent, on-time performance (OTP) and the promptness of schedule flights had fallen to as low as 15 per cent, adding that the staff, including pilots were owed salaries, in some cases for up to six months.
However, what might have contributed to poor performance of the airline then was the protracted scarcity of aviation fuel that paralysed the aviation industry at that period and the recession, which upped the value of dollars to N500 per dollar, which made it almost impossible for airlines to purchase spares and pay for overseas maintenance of their aircraft, as they sell tickets in the local currency but pay in dollars for checks, training and spares.
On Aero Contractors, Kuru said that AMCON succeeded in ensuring that the airline remained a going concern.
