Arik Air Now Revitalized, AMCON’s Mandate Met – Manager

The Management of Arik Air have described as malicious, reports in some media that the Airliner was not performing well and that the Assets Management Company of Nigeria (AMCON) was delaying in selling the company.

In a statement issued in Abuja on Thursday, signed by Oluseye Opasanya, SAN, Receiver Manager, Arik Air, he said that the report titled: “Two years After, AMCON Yet to Get Buyer for Arik”, was based on false claims.

The premier newspaper reports that the vision of AMCON as contained in their website is “To be a key stabilizing and re-vitalizing tool in the Nigerian economy.

The manager in the statement stressed that the core mandate of AMCON was to intervene and ensure the revitalization of companies, adding that Arik had made significant progress in the last two years with AMCON.

Throwing light on the condition in which the airline was in before the intervention, he said that Arik Air was headed for doom with poor management, non-payment of staff salaries and many abandoned facilities, even as regulatory agencies were owed a lot of money.

“The fleet was down to only eight serviceable aircraft, many of its assets were abandoned in different parts of the world and the maintenance hangar littered with unserviceable aircraft and related equipment. Even some of the serviceable aircraft were due for various checks.

“Fleet insurance was due and the airline basically struggled to pay the premium. Vendors were being owed colossal amount of trade debts to the extent that no oil marketer was willing to advance trade credit to the airline.

“The former management found it extremely difficult to pay for fuel and as a result flight cancellation was rife, on-time performance (OTP), which is a measure of an airline’s ability to meet scheduled flight time plummeted leading to significant customer attrition and loss of confidence,” he said.

The manager argued that in the two years that AMCON had taken over Arik and appointed a Receiver Manager, the company had returned to solvency and was now making profits.

He said that at the time AMCON intervened, the Airline was down to only eight operational flights, stressing that the company had now increased its operational flights to 13.

“On Time Performance which had fallen abysmally to 19 % a month before AMCON’s intervention, climbed up steadily and currently averages 63.5%.

“Cancellations which were as high as 40 per cent as at January 2017, has been significantly reduced to less than 4 per cent, average load factor is currently over 73% whilst aircraft utilization has also increased by about 50%.

“There has been a gradual increase in the number of serviceable aircraft as a result of huge investments in fleet maintenance. In the first and second quarter of 2018, the fleet serviceable planes increased to 13. The claim that the fleet of serviceable planes fell to three is patently false,” he said.

The manager went on to disclose that prior to the intervention by AMCON, Arik Air owed over N300 billion and had lost confidence of creditors, ventors, part suppliers and was at risk of having its air crafts arrested.

He therefore disclosed that currently, critical vendor relationships had been revamped and trade lines restored as Arik now enjoys the confidence of partners while also paying all staff salaries.

“The airline is being run under unique governance arrangements that has ensured that costs are prudently optimized and that all departments of the company function in an orderly and professional manner.

“It is gratifying to report that the airline’s Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was negative in 2017 but in 2018 was significantly positive. The financial trajectory has been positive, proving that a professionally run airline has a future in Nigeria.

“Following the impressive performance of Arik Air in Receivership, local and foreign investors are showing keen interest in the airline,” he said.

He therefore assured the flying public that Arik in receivership is operationally sound, professionally run and safe and will continue to be a major and dominant carrier in the aviation industry.