Chinedu Eze
The Managing Director and Chief Executive Officer of Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Lawan Kuru has urged the 9th Senate to work towards making Arik Air a national carrier.
Kuru said that this is necessary because the country needs major airlines that could effectively compete with international carriers, adding that Arik has the capacity to become the fulcrum to a new national airline in the bid to stem the imbalance where huge amount of money is repatriated out of the country by foreign carriers.
He said the time is now for the National Assembly to ensure that the government leverages Arik Airline as a stepping stone towards setting up a national carrier rather than trying to set up a brand new airline from the scratch, which would cost the federal government a fortune, especially in the face of the nation’s tight budget.
Kuru who made the call in Abuja yesterday when he appeared before the Senate Committee on Banking, Insurance and other Financial Institutions, called on the National Assembly to reform the aviation sector, which would help local airline grow and attract many other investors that are eying Nigeria’s huge aviation business opportunity.
The AMCON Chief Executive also recalled how respite came the way of Arik Airlines, which was immersed in heavy financial debt burden that threatened to permanently ground the airline when AMCON took over and restructured the operations of the airline.
According to Kuru, prior to AMCON intervention, the airline, which hitherto carried about 55 per cent of the load factor in the domestic market in the country, went through difficult times that were attributable to allegedly bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues.
He said that it was this unfavourable situation that led to AMCON intervention.
“If AMCON did not step in at the time it did, Arik would have gone under like many before it,” Kuru said.
According to him, having retrieved Arik from the brink of collapse and restructured and positioned it on the path of growth and profitability, “the time is now for the National Assembly to ensure that the government leverages Arik Airline as a stepping stone towards setting up a national carrier rather than trying to set up a new airline brand from the scratch, which will cost the federal government a fortune, especially in the face of the nation’s tight budget.”
He explained that with the right support and investment, Arik, has all that it takes to become a massive airline given the volume of reformative and transformational work AMCON did upon intervention in 2017, adding that to do that the National Assembly “owes it a duty to reform the aviation sector by reducing the different layers of charges by different agencies, which makes it extremely difficult for airline to survive in the country.”
“Arik has enough aircraft and facilities that can be used to set up a new airline. Even if the government wants to set up a national carrier to service just the domestic market, which currently has a lot of gap, it is possible with what Arik currently has. Today if you want to travel to Lagos from Abuja and you did not book your ticket two or three days earlier, the chances are that you may not get a seat, which tells us that there is a serious gap. To address the gap means that operators such as Slok Airlines and the likes may have to come back to Nigeria air space. But for them to come back, there needs to be a lot of aviation reforms, so that it will be attractive.
“There is something the National Assembly should do to help the aviation industry. Why is it that there is no airline in Nigeria that has successfully existed for 10 years? We have successful businessmen in Nigeria, which tell you that what is happening in the aviation sector is a structural problem that needs to be address and I think the National Assembly has a role to play there.”
Earlier, Chairman of the Committee, Senator Uba Sani, said AMCON was invited to provide the committee with an in-depth and holistic understanding of operations and activities of AMCON.
He affirmed after the presentation that AMCON and its operations are critical to the stabilisation of the Nigerian financial sector, which has been proved beyond reasonable doubt since its establishment in 2010.
According to him, AMCON within the period has indeed stabilised the financial industry with its action and has provided succor to financial lending institutions in the country when it acquired majority of the NPL of Deposit Money Banks (DMBs) in the country.
Declaring that the heavy debt burden of AMCON has become a burden to the federal government, which is no longer unacceptable, Sani disclosed that the 9th Senate was ever ready and has resolved to render their support to ensure that AMCON’s primary focus of revitalising and stabilising the nation’s economy are realised within reasonable time frame.
He said the committee would deepen its collaboration with AMCON to enable the corporation to recover all government assets both physically and finically and return same to the federal government.
