AMCON injects N1.5b in Arik Air to stabilise operations

The Asset Management Company of Nigeria has injected N1.5 billion in Airk Airline Limited to safeguard its operations since its takeover.
Captain Roy Ilegbodu, Arik Air Chief Executive Officer, said this at a news conference in Lagos, while highlighting the company’s operations since its takeover by AMCON.
Ilegbodu said the funds injected by AMCON helped in the stabilisation of the airline’s operations, prevention of its collapse and payment of staff salaries.
He said the funds were injected into the company in the first couple of weeks the new management took over the airline.
Ilegbodu said the management met a lot of refund when it took over the company, noting that it paid between N60 million and N75 million to customers as a refund on a weekly basis.
He said that the company had remained in business due to AMCON ‘s support, adding that the support helped in sustaining the airline operations in spite of huge debts incurred before the Federal Government takeover.
He said AMCON’s intervention in the airline was timely because the things on grounds showed that the company would have collapased in the next couple of weeks or months.
Ilegbodu said there were no spare parts in the stores to support the airlines operations with huge bills left unpaid and people refusing to offer credits to the company due to breach of trust.
“When we started on February 9, we took our time to study what was on ground in Arik. It was quite interesting and disturbing for an airline with 30 airplanes on its books with only 10 functional,” he said.
He said AMCON’s intervention helped the company to seek for spare parts, noting that it would be flying 14 airlines by the middle of this month.
The chief executive officer said the company was engaging its creditors on the way forward, adding that the receiver manager was currently in London to discuss with foreign creditors.
He said KPMG had been appointed to carry out a proper audit of the books, adding that more revelations were coming up on daily basis.
According to him, the outcome of the audit will enable the government to decide on the next line of action.
“We are all looking forward to the closure of the audit because it will show the true position of the company,” he said.
Ilegbodu said the company slowed down operations by scaling down on international flights, suspended some of its aircraft to have good control of operations because of huge damage discovered in Arik.
He said: “Aviation is a business of a many moving parts.
“Processes in the industry are very well regulated and guided too.
“They call it a business of many moving parts and everything is done systematically.
“We have managed to stabilise operations and we have been able to clear the staff salaries.
“A lot of expatriates have been paid to date.”
He added the company had achieved a level of stability, noting that passengers number had gone up with the lifting of over 3,000 passengers on April 28.
Ilegbodu said the company would continue to engage people and manage situations to woo customers back to the airline.
He, however, assured customers that things would normalise in the airline in the next couple of weeks.
“As I speak we have achieved a level of stability and customers numbers had gone up. We have stabilised operations, the airline will survive and there is a potential for the airline to grow,” he said.
On the challenges affecting aviation industry, Ilegbodu said the industry was capital intensive and should be for long-term purpose and not short-term.
He said Nigeria had the potential to produce the highest airline in Africa based on its population, but needed people with the passion, financial muscle and competency.
Ilegbodu listed the instability in the foreign exchange market as another factor affecting the industry, adding that strong business plan was imperative to avert incessant collapse of airlines.
AMCON on February 9 took over Arik over a N135 billion debt and appointed a new management led by Ilegbodu.