The Nigerian government has taken control of the management of Arik Air, a privately owned local airline.
Arik Air is Nigeria’s largest airline, servicing major local and international routes. At peak operation, it carried an estimated 55 percent of all air traffic within the country.
In recent times, though, the carrier has barely managed to stay afloat due to a combination of poor management, a bad business model, and a crippled local economy that has contributed to the near collapse of the airline.
On Thursday, the Nigerian government announced the takeover of Arik Air’s operations in order to save the airline from total collapse, reports Vanguard Newspaper.
A statement issued by the Nigeria’s Asset Management Company (AMCON) announced the official takeover:
For some time now, the airline, which carries about 55 percent of the load in the country, has been going through difficult times that are attributable to its bad corporate governance, erratic operational challenges, inability to pay staff salaries, and a heavy debt burden, among other issues, which led to the call for authorities in the country to intervene before Arik goes under like many before it.
The myriad issues confronting Arik Air of late range from confiscation of aircraft due to non-payment of leases, frequent flight delays, constant fracas between Arik staff and irate passengers at both local and international airports etc.
The statement further announced that Capt. Roy Ukpebo Ilegbodu, a respected aviation expert, would manage the company and attempted to allay airline and aviation workers’ fears of impending job losses.
Nigerian Aviation Minister Senator Hadi Siriki lauded the development, saying, “We believe that this appointment is timely and will stabilize the operations of the airline.
“This will enhance the long term economic value of Arik Air and revitalize the airline’s ailing operations as well as sustain safety standards, in view of Arik Air’s pivotal role in the Nigerian aviation sector.”
The Nigerian air travel industry is perhaps one of the sectors that has been worst hit by the country’s current economic crisis. Last June, several international airlines announced that they were suspending flight operations or withdrawing completely from the Nigerian market as it was no longer profitable.
Operators say the acute shortage of foreign currency and a scarcity of aviation fuel is mostly to blame.
Nigeria, Africa’s largest oil-producing country, has been hit by a slide in the price of crude oil on the international market, a consequent shortfall in government revenue, and a foreign exchange crisis.