By Kelvin Osa Okunbor
Disagreement over the status of Nigeria Air between the Ministry of Aviation and the Assets Management Corporation of Nigeria (AMCON) is scaring prospective investors from the proposed national carrier, The Nation has learnt.
It was also gathered that it would amount to waste of scarce resources for the government to engage in additionan cash expenditure trying to set up a new carrier when it already has substantial stake in Aero and Arik Air currently under AMCON’s management.
An expert familiar with the matter, but who asked that his identity be veiled, said contradictory proposals by the Ministry of Aviation and AMCON on the template to be adopted in creating the new airline is projecting promoters of the project as lacking appropriate strategy.
He said suggestions by the Managing Director of AMCON , Ahmed Kuru, that Arik Air should be converted into the new National Carrier were not only evidence of departure from its mandate, but an indication that the interventionist agency was not properly apprised of the plans of the Federal Government for the sector.
The expert said the debt profile of Arik Air when AMCON took it over a few years ago was sufficient proof that such a mismanaged carrier would not attract the attention of investors.
However, the Minister of Aviation , Capt Hadi Sirika faulted the position of AMCON, saying Arik Air was not in the thinking of the Ministry.
Read Also: AMCON’s debt to be N6.6tr by 2024
He said the structure of Arik Air does not meet the standard for the kind of carrier the ministry intends to set up. “The carrier that I intend to bring is such a carrier that will support the national economy, with $450 million GDP (Gross Domestic Product) for 200million people and well equipped to compete favourably.
“However, Arik as an entity can either buy shares in the new venture or invest in any manner in the business as presently approved.
“We are not saying once we have a national carrier, every other airline goes down. No, it is our duty to continue to support businesses.”
Speaking on the matter, Head of Research and Strategy, Zenith Travels, Olumide Ohunayo, said it would be inappropriate to establish another national carrier while government is still keeping its stake in Arik Air and Aero, saying the funds set aside by government cannot deliver the new airline.
Ohunayo said: “I think from the very first day the idea of a national carrier was mooted, I advised government to look at the merger of Arik and Aero.
“We cannot have two airlines owned by the government and struggling to survive and you start a third one to compete with it. It’s not done, either you liquidate them outright and start a national carrier, or take the two of them and use that to build a national carrier based on the funds you have invested. Government has funds that were invested through AMCON so you already have a stake.
” If you look at the cash budgeted, that cannot do anything to start a national carrier from the scratch. As at today, we have not seen a clear cut investor that is ready to partner with the Federal Government. I think the best way to go is to look at the Arik, Aero option and move with it.”
However, Chairman Nelike Capital, Alex Nwuba, urged the government to eschew short cuts in everything, stating that a national carrier should start on a clean slate.
He said: “Simple, we should stop looking for shortcuts to everything, a clean sheet national carrier is best as it staves off litigation and potential liability.”
The Managing Director of Akwaaba Travel Quarterly (ATQ), Ikechi Uko said with Arik and Aero, the Federal Government can achieve whatever it wants in terms of transforming it into a national carrier because the two carriers have great assets.
“I am of the opinion that we can achieve with Arik and Aero what we want with the new national carrier. There is a lot of Institutional memory embedded in both organisations and they have great assets that can be converted. They have made errors we can learn from. They also have clients that can be leveraged by new investors. I will vote for converting them into a national carrier,” he said.
Already, the Federal Government has proposed to spend N4,694,131,965 as working capital on Nigeria Air as contained in the Ministry of Aviation’s 2020 budget proposal now before the National Assembly.
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