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FG takes over distressed Arik Air, gives lifeline

BellaNaija.com

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From all indications, respite may have come the way of Arik Airline who is currently immersed in heavy financial debt burden that is threatening to permanently ground the airline. For some time now, the airline, which carries about 55% of the load in the country, has been going through difficult times that are attributable to its bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues, which led to the call for authorities in the country to intervene before Arik goes under like many before it.

The federal government however has come to its aid and will now be managed by Roy Ukpebo Ilegbodu, an aviation expert, under the receivership of Oluseye Opasanya (SAN).

Some of the issues that have affected Arik Air of late were confiscation of aircraft due to non-payment of leases, frequent flight delays, and constant fracas between its staff and aggrieved passengers.

On Tuesday, some passengers disrupted operations at its headquarters at the Lagos airport.

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 they enjoy from passengers.

“The airline is so overwhelmed to the extent that the worker’s wages are not paid for several months, leading to occasional confrontation between the management of Arik and different Aviation Unions in the country,” Asset Management Corporation of Nigeria (AMCON) said.

“It was Arik’s inability to pay its workers for seven months that forced the United Labour Congress (ULC) and Engineers Union to recently shut the offices of the Airline across the country causing untold hardship to thousands of travelers 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 also 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.”

AMCON said Arik, the largest local carrier, can now go back to regular and undisrupted operations to avoid job losses, protect investors and stakeholder funds. The decision to intervene clearly underscores the government’s commitment to instill sanity in the country’s aviation sector to prevent a major catastrophe.

Hadi Sirika, minister of state for aviation, expressed the belief that the development will bring about stability in the airline.

We believe that this appointment is timely and will stabilise the operations of the airline,” he said in a statement.

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

Sirika also pledged that the ministry of aviation would support the new management of the airline and ensure that all necessary steps are taken to ensure that there would be no undue disruption on Arik’s regular business operations.

Recall that the Nigerian Civil Aviation Authority (NCAA) announced it has fined Arik Air N6m over its passengers’ complaints of delay and inability of the airline to ferry their luggage from London to Lagos from the 2nd, 3rd and 4th of December, 2016.

The NCAA has also directed the airline to pay affected passenger, the sum of $150 each as compensation for inconveniences suffered as a result of the delayed arrival of their luggage, within 30 days of the date of the letter.

17 Comments

  1. Eniola

    February 9, 2017 at 4:27 pm

    B.N.
    Please, I need a part-time job
    I’m a final year student of English, I can edit and write nice articles

    Please, B.N., Just try me and see

    • tunmi

      February 9, 2017 at 5:12 pm

      Send in your best article on a topic that interests you and include this same comment in your blurb. Or let your comments show your writing skills with the same message at the bottom. Show proof of your writing rather than requesting without attaching something tangible

    • A

      February 9, 2017 at 5:56 pm

      Currently looking for tech-savvy writers. If this is you, might have a spot for you.

    • A

      February 9, 2017 at 8:11 pm

      Ahhhh,who is stealing my name ooo? I am the only A here ooo, I called dibs, hahaha. Anyway, being a private company didn’t help it,it’s now the Government that will revive it? I laugh in French. Pray tell,where is Nigeria Airways @ Federal Government?

    • Anon

      February 9, 2017 at 8:38 pm

      Don’t worry, “Chinese baby” changes her name all the time but the picture remains the same.

      She may have “B” tomorrow…

    • Lola

      February 9, 2017 at 6:49 pm

      We are looking for blog writers apply on assisttohire.com as an employee

    • ade

      February 9, 2017 at 8:29 pm

      Eniola, send an email to [email protected]

  2. naima

    February 9, 2017 at 4:45 pm

    You say “Finally” as if it is a good thing in the long run. Nationalisation is always a terrible idea because government-run businesses tend to breed inefficiency and starve other critical development projects of much needed funds. Government’s role is to provide enabling environments for successful businesses to thrive, not to run businesses themselves. If CBN prints money to save Arik and other failing businesses, we’ll probably have inflation at 25% before year end, which further erodes the value of your Naira savings and future earnings (Let’s not even get to the impending devaluation, we all know it will happen this year.)

    Much better value would have been for a foreign airline to acquire Arik, but I guess Richard Branson’s bad experience with Obasanjo and then Aviation Minister Fani Kayode has scared them all away. It’s such a shame that Nigeria has so much real potential on paper but bad seeds and block brains in government keep setting us five steps back when we take one step forward.

  3. tunmi

    February 9, 2017 at 5:12 pm

    Finally??

  4. Eniola

    February 9, 2017 at 5:20 pm

    @Tunmi
    I’ll do just that
    Thanks.

  5. Eniola

    February 9, 2017 at 6:43 pm

    @A. Please, how can I contact you?

  6. slice

    February 9, 2017 at 7:24 pm

    They should sell it. People will buy

    • Not so

      February 9, 2017 at 9:47 pm

      I don’t think so because of the debt attached to the business, people might not want to buy.

  7. GANNY OGUNSHAKIN

    February 9, 2017 at 7:50 pm

    The Federal government of Nigeria should inform us exactly how much this bailout will cost the Country Secondly, How is Nigeria going to bank roll this emergency take over?. Thirdly, tell us how and when are we going to recoup all our investment back with interest?. Fourthly, Nigerians need to know how the government got to pick members of the new team managing the affairs of the defunct airline.? Lastly We need to know why the federal government of Nigeria intervened and not allow this Company to die just like others before it? Broke ass Federal government of Nigeria shouldn’t be getting itself involved in this type of situation. ( picking losers and winners in business period. ) A word is enough for the wise. I’ m just saying.

  8. Agu

    February 9, 2017 at 8:04 pm

    Thats the right move by the federal government. It will save jobs. What the can do now is to restructure the company and make it Nigeria Airline And call it ‘Air Nigeria or Nigeria airline and Let the private individuals or company buy some stakes on the airline.

  9. Sansarai

    February 9, 2017 at 8:42 pm

    Arik can die and be buried for all I care. They should sha release my refund before they finally kick the bucket

  10. Eniola

    February 10, 2017 at 9:31 am

    @Ade. I just sent a message to you. Thanks.

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