After news of a national airlline carrier for Nigeria tantalized the aviation sector airways, a likely merger and conversion of assets of Arik Air and Aero Contractors is one of the options being considered by the Federal Government (FG) in the buildup to a new national carrier for the country.
The option, according to sources, is due to the alleged debt burden of the airlines. Besides, despite government’s recent intervention since their takeover by the Assets Management Corporation of Nigeria (AMCON), the airlines are not promising in terms of operations and debt payment.
The conversion plan, though already faulted by some stakeholders, will further reduce private domestic operations to six airlines, with the attendant debt burden and legal issues for the prospective national carrier. The antagonists urged the government to start the airline from the scratch, ensuring it is publicly owned and free from political interference. The defunct Nigeria Airways was the country’s national and flag carrier between 1958 and 2003. The airline, fully owned by the Federal Government, was liquidated over mismanagement, corruption and over-staffing, with its indebtedness put in the region of $78 million (N23.8 billion).
While its asset was bought over by Arik Air in 2007, no fewer than 6000 workers were still being owed severance packages to the tune of N78 billion. Floating a new choice flag carrier has been on the front burner of discourses by the current administration since 2015. The government, penultimate week, appointed advisers to help set it up and develop its aviation infrastructure.
Top sources in the Ministry of Aviation told The Guardian at the weekend that “all options, including the rumour surrounding Arik Air, Aero, are all on the table to choose from.
“Left to some parties, government should just build a strong carrier from these troubled airlines. Not only Arik or Aero. There are other defunct airlines, about 10 of them, still owing government.So, government is aware of these options and other issues that can come out of it. I can tell you that the best of all the options will be taken to suit the interest of all Nigerians. That is why the matter is currently before advisers to recommend appropriately. But for now, nothing has been decided,” a source, who craved anonymity, said.
Arik Air, which emerged from the assets of the defunct Nigeria Airways some 10 years at the giveaway price of N600 million drew the displeasure of some stakeholders who are now insisting that the Federal Government should take over the “national assets” from the airline.
The 28-aircraft capacity flag carrier was taken over in February amid the allegation that the former managers were indebted to the tune of N387 billion. In fact, it was last week rumoured that there were some moves by AMCON to liquidate the airline and sell it to the Ethiopian airline or go into merger to birth a new national carrier. Both claims were, however, denied by the agency.
Its Head of Corporate Communications, Jude Nwauzor, said even if government wanted to take that route, “it will not be under the table.”But the Minister of State for Aviation, Hadi Sirika, said a group of six advisor firms, including German carrier Lufthansa that currently services Arik, would counsel the government on setting up a national airline, an aviation leasing company and a maintenance hanger in line with the administration’s planned concessioning of the airports.
Reacting to the development, the Secretary General of Aviation Round Table Initiative (ART), Group Captain John Ojikutu (rtd), sanctioned a new carrier but with a caveat.
According to him, the shareholding in the proposed airline should be 55 per cent for the nation while foreign technical investors should hold the rest 45 per cent. He offered that the 55 per cent should be distributed as follows: 36 per cent for the states, with each of them holding one per cent; 18 per cent for principal investors from every state, each holding 0.5 per cent while Abuja and its principal access one per cent.
To the Chairman of Nigerian Aviation Safety Initiative (NASI), Capt. Dung Rwang Pam, the conversion of the two beleaguered airlines should be a second thought after all moves to restructuring and returning them to profitability might have failed.