Convert Arik Into Nigeria’s National Carrier, AMCON CEO Urges FG

Managing Director/Chief Executive, Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, on Monday in Abuja, spoke of the need for the Federal Government to adopt Arik Airlines as the national carrier, rather than establishing a new one from scratch.
Appearing before the Senate Committee on Banking, Insurance and other Financial Institutions led by Senator Uba Sani, he based his argument on the huge cost of establishing a fresh national carrier from scratch, especially given the nation’s budget constraints.
With the right support and investment, Kuru said Arik, which AMCON took over in February 2017, has all that it takes to become a dominant airline, given the volume of reformative and transformational work the corporation did following its intervention in 2017.
He also called for an overhaul of the entire aviation industry, a situation, he believes will help local airlines remain in business, grow and attract investments into Nigeria’s huge aviation business opportunity, given the sector’s strategic and critical roles in the economic development of any nation.
But to do that, Kuru said the National Assembly must reduce the different layers of charges by different agencies, which makes it extremely difficult for an airline to survive in the country.
Converting Arik into the national carrier, he stressed is the cheapest option, arguing that its takeover and restructuring of Arik by AMCON to the company’s heavy financial debt burden that threatened to permanently ground it.
For a start, he assured, “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 gaps, 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. This 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 the Nigerian 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 addressed and I think the National Assembly has a role to play there,” he stressed.
He recalled that prior to the AMCON intervention, Arik Air, which carries about 55% of the load in the country, went through difficult times attributed to its bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among others issues, situation, he said, led to the intervention.
“If AMCON did not step in at the time it did, Arik would have gone under like many before it,” he told the committee.
One other challenge of Nigeria’s aviation industry, he told the Senators, is the lack of good corporate governance among operators, because they are usually one-man businesses with a business structure that has all sorts of management challenges.
“But having said that, the current state of the sector is not helping the operators, for instance, the fees and charges they pay to different agencies regulators are too high. There are quite a lot of issues that I think when we sit down to address, we should be able to help the industry because it is very strategic to the development of the economy of Nigeria,” he stressed.
The AMCON management, Senator Uba Sani said, was invited to provide the committee with an in-depth and wholistic understanding of its operations and activities.
AMCON and its operations, he affirmed, are critical to the stabilization of the Nigerian financial sector, which has been proved beyond reasonable doubts since its establishment in 2010.
According to him, AMCON within the period has indeed stabilized the financial system with its action and has provided succor to financial lending institutions in the country when it acquired a majority of the NPL of Deposit Money Banks (DMBs) in the country.
Expressing worry over the heavy debt owed to AMCON, which has become a burden to the Federal Government, and is no longer unacceptable, Sani said the 9th Senate will support and ensure that AMCON’s primary focus of revitalizing and stabilizing the nation’s economy are realized within a reasonable time frame. He promised that the committee will deepen its collaboration with AMCON to enable the corporation to recover all government assets, both physical and financial, and return the same to the Federal Government.

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.