The Asset Management Corporation of Nigeria (AMCON) is considering merging Arik Air and Aero Contractors to create a new national carrier.
The AMCON Managing Director/Chief Executive Officer, Gbenga Alade, announced this at an interactive session with media executives in Lagos.
Alade cited that Arik Air owes $52 million to Afreximbank, while Aero Contractors is also heavily indebted. Both are owing so much money that they may not be able to pay.
Alade expressed concerns about the airlines’ financial struggles, stating that their situation is giving him “sleepless nights.” He noted that AMCON had previously proposed merging the airlines into a national carrier, but the idea was rejected by the former aviation minister.
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He also discussed possible solutions, noting that they have engaged with Arik’s major international creditors, including Afreximbank, to find a way out. But after negotiations, the airline was only willing to pay $8.5 million of that amount.
“However, where will that $8.5m come from? Where? AMCON doesn’t have money of its own to put there,” he said.
Alade stated that during the negotiations, there was a suggestion to take away some of Arik’s engines as a final settlement of the debt. However, he was against this idea because it would cripple the airline.
AMCON’s efforts aim to address the financial challenges facing Arik Air and Aero Contractors, ensuring the sustainability of Nigeria’s aviation industry. The corporation is working to keep Arik operational, targeting seven flying planes by February next year.
The plan involves creating a new special purpose vehicle (SPV) to facilitate the merger, as the previous SPV was sold. Alade emphasized that the goal is to stabilize the airlines, preserve jobs, and create a viable national carrier that benefits Nigeria’s economy.
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This proposal comes after the controversial Nigeria Air project was suspended due to concerns over its ownership structure, which favored Ethiopian Airlines. The Federal High Court in Lagos recently nullified the sale of shares in Nigeria Air to Ethiopian Airlines.
