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How AMCON saved Arik Air from going under

It has been gathered that Arik Air would have closed shop by the 12th of February if the Asset Management Corporation of Nigeria, AMCON, had not intervened in the crisis rocking the carrier.

This is as the company has started receiving assistance to be able to offer smooth flight services to customers 48 hours after its takeover by the federal government.

Recall that the federal government had, through AMCON taken over Arik, which is Nigeria’s largest domestic carrier. It explained that the decision to intervene “clearly underscores the government’s commitment to instill sanity in the country’s aviation sector to prevent a major catastrophe”.

THEWILL learnt from a source that the insurance cover for Arik’s aircraft would have expired on February 12, even as virtually all of the company’s trade creditors are being owed, “staff salaries have not been paid for between 4- 6 months, and of the 28 aircraft in Arik’s fleet, only 10 are in operation”.

The source close to the airline related to our correspondent that, “Arik have debts in huge amounts, in excess of N300 billion, especially with some banks, excluding fuel suppliers, lessors and maintenance companies”.

The new management is said to be looking to stabilise its operation by scaling down flight operations based on the number of serviceable aircraft at its disposal, until more aircraft return from C-check and maintenance yards abroad. Therefore a new schedule will be announced in the next few days to accommodate its existing fleet of 10 aircraft.

“It is obvious that without Government intervention Arik would have virtually stopped operation by Monday of next week. We need public support to understand the enormity of the challenges here, while we stabilise operations over the next few days, as we offer safe, secure and timely services to customers.

“Due to the intervention, flights are operating and the insurance cover for the aircraft which would have expired on Sunday, February 12 has now been sorted and trade creditors and fuel marketers have been assured that all indebtedness will be looked into; they have offered to support the new management to get operations run smoothly.

“Flight schedule may therefore be realigned to match the 10 aircraft in the fleet, while also sorting out the myriad of problems confronting the airline. It is obvious that without government intervention, Arik would have virtually stopped operation by Monday of next week.

“Government is making efforts to return the aircraft in various parts of the world in repair yards, with the aim of stabilising the airline to offer safe, secure and timely services to customers,” THEWILL was told.

Reacting to government’s action, the management of the airline vowed to “challenge it to the highest court of authority”.

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