Nigeria's Arik Air taken over by government
Nigeria's state-owned Asset Management Corporation of Nigeria (AMCON) has taken control of Arik Air given the privately-owned carrier's growing inability to settle wage arrears and other debts, reports ch-aviation.
Arik Air reportedly owes AMCON more than NGN135 billion (USD429.6 million at the official bank rate) with other suppliers owed NGN10 billion (USD31.8 million). Aside from domestic debts, Nigeria's crippling foreign currency shortage has also affected Arik Air's ability to procure fuel and to pay off insurance premiums thus impacting its operations.
"Arik Airline has been in a precarious situation largely attributable to its heavy financial debt burden, bad corporate governance ... that required immediate intervention," AMCON said in a statement. “This development will also afford Arik Air to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholder funds as well as ensure safety and stability in the already challenged aviation sector."
Under receivership, AMCON has seconded a new management team to Arik to be led by local lawyer, Oluseye Opasanya. Flight operations are expected to continue unaffected.
Arik Air's senior vice president, Captain Ado Sanusi, has, however, said the airline will challenge the court order to the furthest degree, reports The Punch.
The Minister of State for Aviation, Hadi Sirika, hopes the move will provide stability. "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 the airline’s pivotal role in the Nigerian aviation sector," he said.