Arik Air is bankrupt with huge debts

0
2029

…pilots on mass exodus to other airlines

NIGERIA’S largest air carrier of the moment, Arik Air is allegedly bankrupt. Investigation has shown that he airline is currently struggling to pay staff salaries amidst other overwhelming odds outstanding debts to agencies, fuel suppliers, hoteliers and aircraft maintenance engineers.
The debts of the airline are said to be quite staggering. Investigation has shown that the airline, cumulatively, recorded over N30 billion debts before the intervention of Asset Management Company of Nigeria (AMCON). The intervention of AMCON was initially believed to provide a financial lifeline to keep the airline afloat. But as the company took over 60 per cent of the airline’s equity, the situation exacerbated as the airline now struggles to even pay salaries.
The chairman of the airline, Mr. Joseph Arumemi-Ikhide, was recently quoted in one of the national dailies that the airline had taken a loan facility worth $1 billion from Exim Bank to purchase 26 aircraft. According to him, the motive for securing the loan was to step up the airline’s operations with additional fleet so as to maximize revenue inflow.
When contacted by National Daily for clarification on how the airline intends to offset both the outstanding and the recently acquired $1 billion debts, the chairman declined from giving a convincing response under the pretense that he had travelled out of the country.
In 2009, the airline got N15 billion as its share out of the N300 billion intervention fund granted by the Federal Government but it wasn’t enough to alleviate its financial woes.
According to reports, the current financial situation of the airline could lead to disaster as the workers, across all strata, are said to be owed salaries for several months. Some pilots of the airline are, reportedly, on mass exodus to find breathing spaces in other airlines.
National Daily gathered that the troubled airline in dire financial straits plans to cut hundreds of jobs and most of the pilots already quit their jobs in recent months with some of them leaving to Air Peace, Dana, and Medview airlines, forcing the airline to cancel and suspend flights to some routes.
A staff of the airline, who spoke to National Daily on condition of anonymity, said the airline hardly go for the necessary checks required by the Nigerian Civil Aviation Authority in order to keep the aircraft airworthy. The informant expressed worry that the airline might be undermining safety of passengers, which is a priority in air travel business.
According to the provisions of Annex 19, first edition, the International Civil Aviation Organization (ICAO) emphasizes on the safety of passengers and airlines are enjoined to consider it a priority by ensuring constant maintenance of aircraft. All states’ civil aviation authorities are charged to ensure compliance of the airlines with the standards and recommended practices regarding safety.
ICAO also, strictly, recommends that airlines found in the habit of skipping maintenance schedules should be sanctioned accordingly. And with the current situation of Arik, the NCAA may soon unleash its dragnet to halt the airline’s operations, if the Authority wants to avert a waiting disaster.
Apart from financial woes, the airline is also in the habit of delaying or cancelling flights against the wishes of passengers. This is another violation of the provisional Passengers’ Bill Rights as enshrined in Nigeria’s civil aviation regulations.
The airline has also beeninvolved in cases of drug peddling by its crew recently, a practice that is allegedly instigated by the principal staff of the airline. This is also punishable if the watchdogs are not swayed in the wrong direction.
Though the NCAA has adopted a “pay as you go” policy to minimize debts but aviation unions have had it enough and have sounded a warning to Arik and other debtor airlines to offset all debts owed the agencies within one week. Perhaps, there could be some sanity but the question remains that where will the money come from?

Leave a comment

NO COMMENTS

LEAVE A REPLY