The Asset Management Corporation of Nigeria (AMCON) has said it has plans to sell off assets like Aero Contractors, Arik Air and a host of others this year 2018. With this revelation, many aviation experts are concerned what the outcomes of this decision could portend for the sector in Nigeria and West Africa.
Owing to the assets sales plan, AMCON explained that the proposed disposal of these lead assets will be shelved if the owners of the companies pay their debts. At the sixth Nigeria Transport Awards and Lecture held recently, AMCON chairman, Ahmed Kuru, held the view that the corporation did not desire to be in the airline business.
“AMCON does not wish to be in the airline business or indeed any business apart from its legal mandate. So, AMCON will be willing to exit the firms if the owners of the companies pay the debts owed,” Kuru, who was represented by Kamilu Omokide, AMCON’s senior vice president, said.
Nigeria’s oldest carrier, Aero Contractors which is owned by the Ibru family, had been taken over by the corporation in 2016. Arik, which is owned by Joseph Arumemi Ikhide was also taken over in 2017. These two carriers had been growing strong before the Nigerian economy began to face recession.
Former Vice-Chairman of Arik Air, Senator Anietie Okon, alleged that AMCON had initially prevented the plans by some interest groups in government to take over Arik Air and sell it cheaply to themselves. Senator Okon who revealed this in Lagos also explained that the said interest group took advantage of the financial distress of the airline, adding that- “it was occasioned by the crash of Nigeria’s economy that forced it into recession and the plunge of the value of the Naira.”
According to him, the economic recession made it extremely difficult to obtain foreign exchange and run Arik, which has the largest fleet in the country, adding that the bad economy also affected some other companies in the country, which rely on forex to sustain their operations.
He also said that, “Currently, no Nigerian airline is benefitting properly from the bilateral agreement Nigeria signed with other countries; rather government has given away all the routes to foreign airlines at the detriment of Nigeria’s interest.
“Arik was selling tickets for international destinations in naira while foreign airlines continue to demand for dollars and it had 2,600 staff against that of foreign airlines that may have at most 10 Nigerian staff.
“The economic and social consequences of government not supporting the airline and other airlines in the industry include job losses and the weakening of the value of naira.”
He, however, noted that AMCON’s management is striving to keep the airline in operation but with much difficulty, as most of the aircraft are due for maintenance but without the resources to take them out for repairs, adding that at the 11th year of the airline, the former management had planned to bring in new aircraft from Boeing, the B737 MAX to take over from the existing ones while the later go for heavy maintenance.
With the many challenges that the Nigerian economy is currently facing, and the government’s plan to have a national carrier despite failing with the Nigerian Airways in 2003, one can only but wonder how the government can run a carrier without private partnerships as well as synergies from other countries. Without a virile airline carrier, therefore, the Nigerian aviation sector has a long way off the mark in comparison with other African countries.
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