Nigeria: Arik As Fulcrum for National Carrier

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2 August 2019

There was suggestion from the Asset Management Corporation of Nigeria (AMCON) recently, that Arik Air should be used to form the foundation for the establishment of the planned national carrier.

AMCON's Chief Executive Officer, Mr. Ahmed Kuru, was quoted in a report to have said he wants Arik to be taken as part of the national carrier, "because that is the most sensible thing to do. I believe it is the best thing because it is our assets and we are essentially working on it."

The request to use Arik Air to start the national carrier has ignited reactions from the aviation industry; although when THISDAY enquired from the spokesman of the agency, Jude Nwuzor, the plans AMCON has to push government to adopt the airline as foundation for the nation carrier, he was mum.

Inside Arik sources indicated that the staff of the airline are enthusiastic about the plan and hoped that government would embrace it. An insider told THISDAY that the airline has everything it takes to start a national carrier.

"We have the planes, we have maintenance hangar, we have the manpower and all other things that would be needed. In fact, that is the easiest way and most realistic way to successfully establish a nation carrier within the given short period," an official of the airline told THISDAY.

For an airline that was well reputed for acquiring the first new airplanes after many years the defunct Nigeria Airways brought the last "tear-rubber" aircraft into Nigeria and the airline that was well known in international circles after Nigeria Airways, Arik could become a fulcrum for another national carrier.

The Arik Air official also told THISDAY that using the airline to form a national carrier would put to an end the current quagmire in which the future of the airline is beclouded in uncertainty as it is well-known that AMCON would not continue to manage the airline, as the organisation made it known that it was not an expert to manage airlines, but a debt recovery agency of government.

THISDAY spoke to the Managing Director of Aero Contractors, Captain Ado Sanusi, who said that it was unlikely that Arik would be used to establish a national carrier because of the huge debts dangling on the neck of the airline.

Sanusi also noted that Arik could be used if government was determined to do so but observed that before government could embark on such move, it must secure the approval of the original owner of the airline.

He recalled that Korean Air was a privately owned airline in which government bought control share and it migrated from flag carrier to national carrier.

"I don't think it will be easy if they decide to use the airline because it has outstanding debts and the debts are very, very heavy. My suggestion is that government should first of all deal with Arik and Aero problem. If it is liquidation, let them do, so that government would resolve the problem.

"It won't make economic sense if government has shares in Aero and Arik and it wants to establish a national carrier, which will be a different entity from these two. It means that government will be competing against itself. This issue of Arik and Aero must be addressed first," Sanusi said.

He noted that government through AMCON owns 60 per cent of Aero Contractors and has substantial ownership in Arik Air and suggested that it would be good to have national carrier, but government could strengthen Aero and Arik to bring new planes.

Sanusi also explained the need why the problem of Arik and Aero should be resolved.

"Starting a new national carrier, means that government will bring in technical partner like Qatar, Ethiopia Airlines or any other airline. The technical partner will obviously want to take money back to their country.

"This is because the technical partner is really in business to make profits. Nobody cares for you; everyone is there for his interest, but this will not be the case if the matter of the airlines are resolved and new airline established from them," Sanusi added.

Also reacting to the suggestion that Arik Air should be used to form the foundation of the next national carrier, industry consultant and CEO of Belujane Konsult, Chris Aligbe said such plan would be the beginning of the end of the new national airline.

"Why is it now that AMCON is talking about it? It is better they start a national carrier with a clean slate. Don't they think there could be litigation that could not only be in Nigeria but also outside Nigeria? I don't think it is well thought out idea. It is not a great idea.

"I support national carrier but I do not support this way of establishing one because it will create a lot of problems for the national carrier ab initio. I support national carrier but I don't support this approach," Aligbe said.

Industry observers are looking forward to government's decision on Aero and Arik and whether it would start the new national airline without them.

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