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Published On: Wed, Nov 27th, 2019

AMCON’s proposal on National Carrier inimical to growth of aviation industry

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From Suleiman Idris, Lagos

A former Public Relations Officer with the Nigerian airport authority and Managing Director of Belujane Konzult, Mr. Chris Aligbe has described a proposal by the Asset Management Corporation of Nigeria (AMCON) to the effect that merging domestic carriers Arik Air and Aero Contractors to form the proposed National Carrier is best for the country as a step toward truncating Nigeria vision of owing a national carrier.
The Managing Director of AMCON, Mr. Ahmed Kuru had told members of the National Assembly at a budget defence session that the both airlines should form the Nigeria Air Project rather than form a new one.
Kuru’s proposal has elicited a flurry of comments and interventions by well-meaning industry analysts and stakeholders; with some supporting AMCON’s position and others opposing it.
Aligbe posited that hitherto stakeholders were not convinced of the need for a new national carrier but that the stark realities of the country’s losses in terms of humongous capital flight of over US$1.3billion annually on ticket sales alone by foreign airlines as well as the fact that countries like Uganda, Tanzania and Ghana and Benin republic are set to float national carriers with varying degrees of government equities have undermined the position of those who hitherto argued that national carriers are now out of fashion.
He further questioned the sincerity of the AMCON boss saying “is Kuru sincere in his avowal? What are his indices of Arik’s profitability? AMCON took over Arik with 15 aircraft. How many aircraft has the airline now? What is the debt profile of Arik as at today? How much has AMCON recovered since it took over Arik? What is the operational status of Arik in terms of route network and schedule integrity? What about maintenance integrity which Arik had the highest rating on before AMCON’s takeover?
He warned Nigerians that “AMCON cannot therefore just take us for a ride by telling us at the National Assembly that “Arik and Aero are now positioned for profitability”.
AMCON should publish its score-card to show the “great success” it has achieved so we can clap for it. I dare AMCON to do so because, as at today, what is known is that Aero is keeping faith and in about four years’ time, it’s close to N30billion outstanding debt will be paid off while Arik is not anywhere close.” He said.
The aviation consultant urged the Minister of Aviation, Senator Hadi Sirika to ignore Kuru and AMCON and move on with the project.
The former spokesperson alluded to the fact that since AMCON does not possess, and is not expected to possess turnaround competence for complex organizations like airlines, AMCON, it have engaged renowned firm of Consultants or Turnaround Management Team to engineer their quick (usually 5 years) turnaround.
“If AMCON had taken this road, it would have found that at the time of take-over, Aero exhibited more turnaround symptoms than Arik, despite the fact of by “far larger volume of Arik’s debt”
Aero required a complete turnaround in every material particular; from Management, equipment, market share/positioning, work culture/morale, operational integrity, rundown facilities, safety standards, declined assets overall and impaired and mutilated vision arising from internal (Ownership-Management) wrangling.”
He affirmed that no healthy and virile establishment like the proposed National Carrier be founded on the back of unhealthy and struggling entities just no sensible investor would want to invest in such establishment.

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