The Asset Management Corporation of Nigeria (AMCON) on Wednesday proposed the adoption of Arik Air as the new national carrier.
The Managing Director and Chief Executive Officer of the asset recovery vehicle of the federal government, said the airline had sufficient asset to kick-start a new national carrier, instead of a fresh start being mid-wifed by the Minister of Aviation, Hadi Sirika.
Kuru, who appeared before the Senate Committee on Banking, Insurance and other Financial Institutions, also sought the reform of the aviation sector to help local airline grow and attract many other investors to aviation business opportunity.
AMCON in February 2017 took over the assets of Arik Air and placed the carrier under receivership over alleged mismanagement and debt in excess of over N300 billion by its erstwhile owners. With the sum of N1 billion injected by the federal government, the airline has been stabilised.
Kuru said prior to AMCON intervention, the airline, which carries about 55 per cent of the load in the country, went through difficult times that were attributable to bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues, which led to the intervention.
Having retrieved Arik from the brink of collapse and restructured and repositioned it on the path of growth and profitability, Kuru said now is the time 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.
With the right support and investment, Arik, Kuru insisted, has all that it takes to become a massive airline given the volume of reformative and transformational work AMCON when it intervened in 2017.
But to do that, Kuru said the National Assembly owes the country 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.
“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.”
The AMCON boss, who was in a no holds barred mood before the Senators added, “Aviation in Nigeria is a business that lacks good corporate governance. It is usually a one-man show kind of business and that sort of business structure 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 stated.
