The intervention by the Asset Management Corporation of Nigeria (AMCON), with a fresh fund of N1.5 billion, according to the Chief Executive Officer, of Arik Air, Capt. Roy Ilegbodu, became a strong lifeline for the survival of the company, even as it has currently returned to operational stability.
He also said the takeover of Arik Air by AMCON was timely, as the company was headed to collapse sooner than expected.The huge non-performing loans, accumulated workers’ salary arrears, lack of spare parts for aircraft servicing, high level balkanisation of existing aircraft and declining customer confidence due to cancellations were about to undo the country’s largest carrier.
Ilegbodu, while speaking to finance journalists in Lagos, yesterday, noted that a major pillar of aviation business – trust, was violated severely, both to the creditors and passengers.
According to him, the level of rot in the company were not known until the ongoing audit, which would be concluded soon, started revealing deep seated mismanagement of operations, particularly the balkanisation of aircraft.
Speaking on the strategy adopted to stabilise the ailing carrier, the renowned aviator said the plan from the beginning was to slow down operations to ascertain safety and control of operations, as any slight mix up at that point would damage the whole system beyond rescue.
While assuring that the management under him has steered the airline away from immediate danger to stability in a short period, he said that about six more aircraft will added to the current eight by the middle of this month.
He, however, admitted that there is still a lot of work to be done to get the airline fully back to stability, as debt restructuring for local and foreign creditors are ongoing.
Most worrisome, is the huge backlog of refund to customers, put at between N60 million and N75 million weekly, since the takeover, which he said has become a drain on the company’s operations that need all the money that are available.
He said that the company took up the refunds amicably knowing that the same customers are the ones targeted for patronage in the revamped operations.
Ilegbodu noted that his management, while paying the current salaries of workers, also took up the salary arrears, to ensure that everyone meaningfully contributes to the recovery process of the company.
While reacting to the recent news about investors’ interest in the airline, he said that nothing is wrong with local and foreign investments being directed to the airline.
According to him, Nigeria has the potential to attract and dominate aviation business in the continent, as there is population on the one hand, and a growing middle class on the other hand.
“Investment is actually what we need now, whether from local or foreign investor. The business is capital intensive, so I am not opposed to any interests in the airline,” he said.