Wednesday, February 15, 2017

Nigerian state takes control of Arik Air

Nigeria’s largest airline, Arik Air, has suspended its two long-haul international routes following a temporary takeover of the company by a state entity.

The airline announced Feb. 15 that it was halting services to London and Johannesburg. This followed the decision by the Asset Management Co. of Nigeria (AMCON) to replace the company’s management.

The airline said it would focus on domestic and West African regional routes, but intended to restore them as soon as possible: “The international route is very critical for the strategic turnaround, growth strategy and stability of the airline. Therefore we intend to revisit the routes immediately and address all the problems inherited.”

Arik Air is attempting to restore stability to its operations. The company is heavily in debt and was badly affected by intermittent interruptions to fuel supplies in the West African nation in the latter part of 2016.

The change of leadership was decided on because of poor corporate governance by previous management, AMCON spokesman Jude Nwauzor told ATW. “It’s Nigeria’s largest carrier and [its problems were] going to have an effect on the economy.”

He added that forensic auditors had been appointed to examine the company’s affairs while AMCON restructured the business. AMCON had stepped in after Arik Air had been unable to pay for insurance for its aircraft and to pay a variety of suppliers, he said.

The fleet, which numbered around 30 a year ago, was now down to “around nine or 10,” Nwauzor said. Aircraft had been grounded because of a combination of factors including debts and a lack of servicing.

Arik Air has a mixed fleet of various Boeing 737s, Bombardier CRJs, and Airbus A330s and A340s. In January, the airline announced it was switching an order for two Boeing 747-8Is for two 787-9s.

(Alan Dron - ATWOnline News)

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