Tag: Arik Air

With the take-over of Arik Air by Asset Management Corporation (AMCON) on Thursday last week, there must be legions out there ready to swear that the airline’s cup was not only full but running over. Indeed, only those extremely unfamiliar with the creeping regulatory, operational and commercial issues that the airline had to square up to in the last quarter of 2016 in particular could have missed the whiff of a somewhat inevitable regulatory action.
Was Arik guilty as charged? The statement by the undertakers –AMCON leaves no one in doubt about their believe that Arik deserves to roast in the furnace: “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”.
It didn’t end there: “The move, which clearly underscores government’s decision to instill sanity in the nation’s aviation sector has also prevented a major catastrophe that would among other factors protect, and preserve Arik Airlines as a going concern. The development will afford Arik Airlines, which is the largest local carrier to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholder funds as well as ensure safety and stability in the already challenged aviation sector. The airline would now be managed by Capt. Roy Ukpebo Ilegbodu, a veteran aviation expert under the receivership of Mr. Oluseye Opasanya, SAN.”
Let’s look a bit more closely at the particulars. December 20, last year, the workers went on strike over unpaid wages, non-unionization and non-remittance of pensions and other statutory deductions. To end the picketing, the regulator, NCAA had to be called in. In a communiqué later signed by representatives of Arik Air, the aviation industry unions – NAAPE, ATSSSAN and NUATE, and NCAA, the airline agreed to pay the outstanding wages in addition to addressing all of the issues that led to the strike including a review of the circumstances of all laid-off employees. True to its culture of impunity, it reneged.
Before then, the airline had been locked in tango over non-carriage of passengers’ baggage and other sundry infractions of regulations involving its London to Lagos flights between December 2 and December 4, 2016. Again, NCAA was forced to slam a hefty sanction of N6 million (a separate compensation of $150 was to be paid to each of its passengers whose baggage was delayed) on December 22. Now, if these events were to be one-off, one would have nursed the hope that the airline would at some point put its acts together by showing some modest improvement. However, rather than address the problems, the airline appeared to have slipped further down the operational abyss the consequence of which was the siege by customers on its counters across the federation over poor customer services in January this year.
In the circumstance of the symptoms appearing more like those of a terminally diseased enterprise, the rather drastic pill by AMCON would seem appropriate.
But then, a more sympathetic look would reveal an airline deserving of more understanding, if not support. I have often wondered how a local airline like Arik can ever imagine that they have a chance in an environment of fierce competition and nary government support. Imagine an airline whose ticket sales are in naira forced to undertake a disproportionate amount of its operations – from basic spares to C and D checks all in foreign currencies; and this when access to forex is not only prohibitive but expensive, and where loans are in double digits. This is where those making a song of corporate governance are yet to tell us, how, like the Avatar of the Christian faith, they expect the board and management of Arik air to turn water to Jet A1!
What do I find wrong with the takeover? Nothing, except that the advertised intention is often time a far cry from the real thing. Casting the proverbial first stone is only AMCON’s first step in the feast of sleaze. You can bet on the corporation releasing mind-boggling corporate infractions in the coming days as Nigerians get set to come to terms with what is potentially controversial corporate takeover of all time.
For now, the N300 billion hole, said to be in the books of banks alleged by AMCON will probably do. Oh yes, that if true, would no doubt take a sector already certified ailing further down the pit. But then, that is AMCON’s words against Arik’s. As for governance issues highlighted by AMCON justifying the takeover, that aside being hardly new, is the same plague suffered by our corporates – public and private – including no less an entity such as AMCON whose record of sale of assets has remained as opaque as the purveyors of the toxic assets!
And the wages palaver? Aren’t all – from state government to some departments of the federal government – sinners who have come short in the courts of the Nigerian worker?
Would the new managers perform magic? Only if they have an untrammeled access to Emefiele’s vaults in the Central Bank of Nigeria. For Hadi Sirika, the aviation minister, it is probably another job in a day after the fiasco of closing down Nnamdi Azikiwe International Airport, Abuja for routine maintenance.
Again, you ask – what do I find irksome about the take-over? Simple: first is the astounding barefaced impunity of the Nigerian corporate elite in their clinical execution of corporate heist; the second is that the exercise is not meant to solve anything. More worrisome however is the growing charge that the exercise is somewhat ethnic-driven. I hope I am wrong on the latter.
Perhaps I need to be more pointed here: Arik Air, in succumbing fatally to the Nigerian atrophy, may be guilty as hell; the point is – are the scavengers now looming over the carcass of the once promising airline any better? Have the same sharks revived Aero Contractors years after taking over?
How bizarre can things get? Imagine an Ado Sanusi, who until Wednesday last week was the Deputy Managing Director of Arik Air now suddenly catapulted into Aero Contractors Airline as Managing Director? The individual, who only 24 hours before had announced the intention of Arik to challenge the take-over! As reward for good services rendered to who and to what end?
Far for shedding a tear for Arumeni Ikhide, the erstwhile chairman of Arik Air, my tears would rather go to the luckless country being raped in such broad daylight.