Arik Air in N300bn Debt Mess, AMCON TAkes Over Airline ….EFCC grills Chairman, Arumemi

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Chairman of Arik Air,Joseph Arumemi-Ikhide
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Chairman of Arik Air,Joseph Arumemi-Ikhide

The Federal Government, through the Asset Management Corporation of Nigeria, on Thursday took over the operations of the nation’s biggest carrier, Arik Air, and appointed Capt. Roy Ukpebo Ilegbodu as its new manager.

It was gathered that the beleaguered airline was indebted to alone to the tune of over N300bn, with AMCON alone owed N135bn; while its obligations to aviation fuel suppliers, insurance firms, aircraft maintenance organisations, the Federal Government and the various aviation agencies, as well as food vendors made up the balance.

Officials of the aviation arm of the Federal Ministry of Transportation and AMCON confirmed on Thursday that Arik was immersed in a heavy financial debt burden that was threatening to permanently ground the airline.

AMCON stated in a statement that for some time now, the airline, which carries about 55 per cent of the load in the country, had been going through difficult times, attributable to its bad corporate governance, erratic operations, inability to pay staff salaries and heavy debt burden, among other issues.

This, it said, led to calls on the government to intervene before Arik would go under like many before it.

It stated that the takeover, which underscored the government’s decision to instil sanity in the nation’s aviation sector, had prevented a major catastrophe that would, among other factors, protect and preserve Arik Air as a going concern.

The development, AMCON said, would afford Arik to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholders’ funds as well as ensure safety and stability in the already challenged aviation sector.

“The airline will now be managed by Capt. Roy Ukpebo Ilegbodu, a veteran aviation expert, under the receivership of Mr. Oluseye Opasanya SAN,” AMCON said in the statement.

Explaining the reason for the takeover, the Minister of State for Aviation, Senator Hadi Siriki, was quoted to have said, “We believe that this appointment (of Ilegbodu) is timely and will stabilise the operations of the airline.

“This will enhance the long-term economic value of Arik Air and revitalise the airline’s ailing operations as well as sustain safety standards in view of Arik Air’s pivotal role in the Nigerian aviation sector.”

The minister pledged that the Federal Ministry of Aviation would support the new management of the strategic carrier, adding that all necessary steps had been taken to ensure that there would be no undue disruption to Arik’s regular business operations or activities of other stakeholders on account of the change in the leadership and management of the airline.

Ilegbodu also assured both the staff members of the airline and all other stakeholders that his appointment would enhance the value of the airline, improve customer experience, and sustain the safety, reliable and secure operational history of the airline before all those were eroded.

AMCON said, “Yesterday (Wednesday), Arik temporarily suspended its flight operations to the John F. Kennedy International Airport, New York, United States, claiming that the two Airbus A330-200 aircraft dedicated to the route have been taken to France for C check at the same time. Equally, more than eight aircraft are currently grounded at the tarmac, making it difficult for the carrier to meet its routine commercial flights.

“The myriad  issues confronting Arik Air of late range from confiscation of aircraft due to non-payment of leases, frequent flight delays, constant fracas between Arik staff and irate passengers at both local and international airports, etc. During the last Yuletide season, passengers were stranded in airports all over the country due to Arik’s incessant flight delays and cancellations, which negatively affected the preference it enjoys from passengers.”

It added that the airline was so overwhelmed that the workers’ wages were not paid for several months, leading to occasional confrontation between the management of Arik and different aviation unions in the country.

AMCON said it was Arik’s inability to pay its workers for seven months that forced the United Labour Congress and the engineers’ union to recently shut the offices of the airline across the country, causing untold hardship to thousands of travellers and an embarrassment to the aviation sector in the country.

“Besides owing workers’ salaries, the airline has also not been remitting the taxes of workers to relevant bodies thus, defrauding the country. The airline is also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing repossession of its aircraft by lessors. Various class actions are pending against the airline all over the world,” the corporation added.

It, however, assured all stakeholders that its intervention was in the best interest of the general public, workers, creditors and other aviation interest groups.

Operatives of the Economic and Financial Crimes Commission had on Wednesday visited Arik Air’s head office and briefly quizzed its Chairman, Mr. Joseph Arumemi-Ikhide.

The airline, in a statement signed by its Public Relations and Communications Manager, Adebanji Ola, said Arumemi-Ikhide later visited EFCC’s Ikoyi, Lagos office for further discussions and to respond to the agency’s enquiries.

“Having satisfactorily answered the query, the chairman later left the EFCC office,” the airline said.

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