AMCON MD wants FG to convert Arik to national carrier

Given the strategic and critical role the aviation sector plays in the development of the economy of any nation, Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru has called on the 9th National Assembly to reform the aviation sector.

Kuru made the call in Abuja on Monday when he appeared before the Senate Committee on Banking, Insurance and other Financial Institutions led by Senator Uba Sani, Chairman of the Committee and Senator Orji Uzor Kalu, the Chief Whip of the Senate and Deputy Chairman of the committee.
AMCON MD wants FG to convert Arik to national carrier
According to him, the reform would help local airline grow and attract many other investors that are eyeing Nigeria’s huge aviation business opportunity.

He added that such reform will enable airlines such as Arik, which AMCON took over in February 2017 remain in business for years to come.

The AMCON chief executive also recalled how respite came the way of Arik Airlines, which was immersed in heavy financial debt burden that threatened to permanently ground the airline when the toxic assets buyer took over and restructured its operations.

He said prior to AMCON intervention, the airline, which carries about 55% of the load in the country, went through difficult times that were attributable to its bad corporate governance.

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This also includes erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues that led to the intervention.

“If AMCON did not step in at the time it did, Arik would have gone under like many before it”, Kuru said.

According to him, having retrieved Arik from the brink of collapse, restructured and positioned it on the path of growth and profitability, the time is now for the national assembly to ensure that the government leverages the Airline as a stepping stone towards setting up a national carrier.

He asked FG to use Arik as national carrier rather than trying to set up a new airline brand from the scratch.

Kuru thinks setting up new airline will cost the federal government a fortune, especially in the face of the nation’s tight budget.

With the right support and investment, Arik has all that it takes to become a massive airline given the volume of reformative and transformational work AMCON did upon intervention in 2017, Kuru said.

But to do that, the National Assembly owes it a duty to reform the aviation sector by reducing the different layers of charges by different agencies, which makes it extremely difficult for airline to survive in the country, he added.

He said, “Arik has enough aircraft and facilities that can be used to set up a new airline. Even if the government wants to set up a national carrier to service just the domestic market, which currently has a lot of gap, it is possible with what Arik currently has.

“Today, if you want to travel to Lagos from Abuja and you did not book your ticket two or three days earlier, the chances are that you may not get a seat, which tells us that there is a serious gap.

“To address the gap means that operators such as Slok Airlines and the likes may have to come back to Nigeria air space. But for them to come back; there is needs to be a lot of aviation reforms, so that it will be attractive.

“There is something the National Assembly should do to help the aviation industry. Why is it that there is no airline in Nigeria that has successfully existed for 10 years?

“We have successful businessmen in Nigeria, which tell you that what is happening in the aviation sector is a structural problem that needs to be address and I think the National Assembly has a role to play there.”

The AMCON boss when appeared before the Senators said Aviation in Nigeria is a business that lacks good corporate governance.

Kuru noted that it is usually a one-man show kind of business and that sort of business structure has all sorts of management challenges.

“But having said that, the current state of the sector is not helping the operators for instance the fees and charges they pay to different agencies regulators are too high.

“There are quite a lot of issues that I think when we sit down to address, we should be able to help the industry because it is very strategic to the development of the economy of Nigeria,” he stated.

Senator Uba Sani, who said the management of AMCON, was invited to provide the committee with an in-depth and holistic understanding of operations and activities of the corporation affirmed that AMCON and its operations are critical to the stabilization of the Nigerian financial sector.

This has been proved beyond reasonable doubt since its establishment in 2010.

According to him, AMCON within the period has indeed stabilized the financial industry with its action and has provided succour to financial lending institutions in the country when it acquired majority of the NPL of Deposit Money Banks.

Sani declared that the heavy debt burden of AMCON has become a burden to FG, which is no longer acceptable.

He disclosed that the 9th Senate is ready and has resolved to render their support to ensure that AMCON’s primary focus of revitalizing and stabilizing the nation’s economy are realized within reasonable time frame.

“The committee will deepen its collaboration with AMCON to enable the corporation to recover all government assets both physically and financially and return same to the federal government”, Sani remarked.

 

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