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AMCON Has Injected N1.5bn Into Arik Air – Capt. Ilegbodu




Managing Director and chief executive officer of Arik Air Limited, Captain Roy Ilegbodu, has revealed that to get the airline back into operation, the Assets Management Corporation of Nigeria (AMCON) pumped N1.5 billion into the company, three months after it took over the debt-ridden airline.

Ilegbodu said the funding provided by the bank enabled the airline purchase the needed parts and pay off some debtors, as well as customers who were owed by the airline.

According to him, the new management had scaled down operations as it worked towards acquiring the needed spare parts for the smooth running of flights.

Confirming that Arik Air was heavily indebted to both local and foreign creditors, Ilegbodu said that they were also engaging with the creditors who are in great numbers.

He added that the new management has, therefore, adopted a systematic manner of approaching the issue, whereby they tackle the bills depending on the amount and urgency.

Other issues discovered in Arik after the takeover, according to the captain, is the decline in the airline’s fleet size, huge bills, lack of trust from creditors, investors apathy amongst others.

All these, Ilegbodu said, had to be handled carefully in order to rebuild confidence from both passengers, stakeholders and business partners.

Justifying the takeover of Arik Air by the federal government, Ilegbodu said, “For an airline that has about 30 aircrafts on its book, they were only about 10 of them that were functional.  If you look at that alone, that tells you that there is a problem in the system. If out of 30 airplanes, only 10 are functional, then there is a problem somewhere. So, one would say that AMCON’s intervention was very timely”.

Stating that AMCON has supported the airline to a greater extent, he sai, “If you don’t have spare parts in the store, there is no way you are going to support your operations. We have been able to source spare parts and we have spare parts arriving on daily basis. As of today, we operate a fleet of about eight aircrafts, but by mid-May, we would have 14 airplanes in service.

“AMCON indeed has been very supportive with funds and that is why we are still here today. I would say that in the first couple of weeks that we took over, AMCON injected approximately N1.5 billion. Basically, that has sustained us comfortably”.

Ilegbodu also said that despite the myriad of challenges facing the ailing airline, AMCON has managed to regain passengers’ confidence, adding that both indigenous and expatriate staff have been paid salaries up to date.

He noted that, while passengers’ number has improved up to 3,000 per day, the new management of the airline is already strategising on how to proceed in the future.

Also, in restoring customer confidence in the airline, Ilegbodu said the airline is making refunds to customers whose flights had been cancelled. He stated that the airline refunds between N60 million and N75 million on a weekly basis to its customers.

“This is because these are the same set of passengers we want to attract to come and fly with us. The best we can do is to manage our relationship with passengers”, he noted, even as he also revealed that part of the funds received from AMCON was also used in offsetting the outstanding arrears owed to the staff of the airline.

Disclosing the state of Arik Air when AMCON came on board, Ilegbodu pointed out that what they met when they started on February 9 was quite interesting.

He said from what they saw, one could  easily deduce that the company would have folded up in a couple of weeks, or maybe months, just as he noted that at the point of takeover, they were no spare parts in the stores to support the airline operations.

On their immediate plans, he said, “We want to get this over as soon as possible. One of the major things we would be depending on would be the report from KPMG so that report will set the tone for how we proceed and how far we would go. I think a KPMG report would be internationally acceptable. So, anyone coming to invest their money would like to see the report. A lot would actually hinge on the report”.

He, however, disclosed that Arik does not intend to resume international routes for now as there are still quite a lot of things to be sorted out.

He said that since Arik is owing a firm called Europe Control about €1 million, it will be difficult to go into international routes without addressing the debt issue.

For this reason, he pointed out that they were not in a hurry to rush back into certain operations so as to avert some operational hitches which may crop up along the way. Read full interview on pages 26 and 27.