Stakeholders in the Nigerian aviation industry have advised the Federal Government to merge Arik Air and Aero Contractors to establish the impending national carrier.
This is so as it may cost the Assets Management Corporation of Nigeria (AMCON) about 30 years to recoup its debts, the stakeholders say.
Speaking over the weekend, John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, insisted that it would be difficult for AMCON to get investors to buy into Arik Air in its present state, saying government should rather merge the airline with Aero Contractors to form a national carrier.
It would be recalled that Arik Air was taken over from its original investors, led by Joseph Arumemi-Ikhide in February 2017, after alleged debts to financial institutions and other partners.
Ojikutu said for AMCON to offset the N300 billion debt from the airline, it should be making a net profit of N10 billion annually for 30 years, stressing that this would be difficult for the corporation to achieve, especially when the current management suspended its entire long-haul routes.
According to Ojikutu, “AMCON does not have the resources to run that airline especially when it suspended its international routes. With domestic operations alone, there is no way the airline can make that profit annually. The only way they can make headway is for the government to merge Aero and Arik and turn them to either national or flag carrier, then bring in foreign technical partners.
“You can’t run any airline at the moment in the country without foreign technical partners. Let the foreign technical partners buy about 30 to 40 percent of the shares, credible Nigerians to buy 20 percent and sell 30 percent to the public.
“The Federal and the State governments should not have anything to do with the airline, but if they must have, they must have nothing more than 10 percent of shares because we want to have a national carrier.”
Ojikutu insisted that lack of financial discipline on the part of airline operators in the country would make it difficult for them to run an airline successfully.
Lukeman Animaseun, Industry expert and the former director of Engineering, Medview Airline, said that the major reason why AMCON took over Arik Air was to recover its money from the company, noting that because of the airline’s debt burden, no investor would be interested in the airline and if AMCON decided to manage the carrier, it would take it about 30 years to recover the money it invested in the airline, considering the airline’s turnover.
Animaseun therefore suggested that the best option for AMCON and the federal government is “to establish a national carrier with the airline.”
He said that it would be a waste of resources and spending a longer time trying to establish a new national carrier, when Arik Air and Aero Contractors, which are under the federal government management, could be used to establish a national carrier.
Animaseun said that Arik Air has structure and it has a fleet which government could maintain and put them back in the air and then grow a national airline from there.
“Arik Air has structure, although AMCON claims it does not have. So my thinking is that there is no need starting a new national carrier; what government should do is to earmark funds and carry out maintenance of all the aircraft in the fleet and start the new national carrier.
“This is the only window AMCON has because it cannot let go of the money it sank in the airline and managing the airline to get back the money through its revenues will take about 30 years because of the airlines profit margin. This is better and easier way out,” Animaseun said.
