Expert says Arik, Aero merger “uncanny step to truncate Nigeria Air Project”
An aviation consultant, Mr Chris Aligbe, has faulted the possible merger of Arik and Aero airlines as suggested by Mr Ahmed Kuru, Managing Director of Asset Management Corporation of Nigeria (AMCON).
He told newsmen in Lagos on Monday that Kuru’s suggestion was misleading because a national carrier should be a brand new one, which had been on the works for the last four years.
The News Agency of Nigeria (NAN) reports that Kuru had urged the 9th Senate during his recent budget defence to work towards making the two airlines a national carrier.
Kuru had said that this was necessary because the country needed major airlines that could effectively compete with international carriers, adding that the airlines had the capacity to become the fulcrum to a new national airline.
He said that the merger would be better stepping stone rather than setting up a brand new airline from the scratch,
According to him, this will cost the federal government fortune, especially in the face of the nation’s tight budget.
Aligbe, however, countered the proposal by AMCON boss, arguing against the idea of merging two airlines “not doing well” to form a new national carrier.
He said the two airlines were fraught with many intractable challenges that would make the product a disaster ab initio.
Aligbe said: “Can any healthy and virile establishment be founded on the back of unhealthy and struggling entities? Will any sensible investor invest in such establishment?
“Where no investors come, such a national carrier will exist on 100 per cent government equity, just like the liquidated Nigeria Airways.
“Have we so soon forgotten the bane of Nigeria Airways? Can AMCON’s liabilities from Aero and Arik, vicariously or inferentially, be assigned simplicta to the Federal Government? Ditto the assets?"
He said if not, then the argument of Federal Government owning Aero and Arik would fail to sail.
Aligbe said there were still a few who believed that the two airlines belong to the government, arguing that it was not true.
“If they were, they would be under aviation not AMCON that has no statutory responsibility on aviation but rather on debt collection,’’ he said.
He said attempt to move outside this statute would occasion international litigation that could be unresolved for many years.
Aligbe explained that this was because both the original owners and creditors would head to court to challenge the federal government.
“Before now, the challenge was that many stakeholders were not convinced of the need for a new national carrier but stark realities of our national losses in terms of humongous capital flight of over US$1.3 billion annually on ticket sales alone by foreign airlines.
“The fact that countries like Uganda, Tanzania and Ghana are set to float their national carriers with government equities have undermined the position of some stakeholders who hitherto argued that national carriers are now out of fashion.
“This, coupled with the fact that the collective operational strength and effort of our domestic airlines has proven grossly inadequate, albeit, unable to provide any anchor for redemptive hope.
“Today, virtually the entire industry and, indeed, the vast majority of stakeholders are either clamouring for or desirous of a befitting national carrier,” he said.
Aligbe said that even AMCON, who did not support the idea of merging when it acquired Aero and Arik, today, wants to key into the idea, though to achieve a corporate, rather than national motive.
He said that Kuru took his proposal to the National Assembly, having failed to secure consent from the Ministry of Aviation.
“The NASS has no statutory/constitutional right to compel the Ministry’s acceptance of Kuru’s fantasy,’’ Aligbe added.
He described AMCON as an “undertaker” that had no modicum of competence and neither developmental vision nor growth plan to turn the airlines around.
He said: “Unfortunately, airlines are much more complex as they usually require more in-dept study and understanding of their state and what is required to enable the achievement of required objectives.
“Airlines in the states of Aero and Arik at the time of takeover required a turn around and since AMCON does not possess, and is not expected to possess turnaround competence for complex organisations like airlines.
“Aero required a complete turnaround from management, equipment, market share/positioning, work culture/morale, operational integrity and rundown facilities.
“Others are the safety standards, declined assets overall and impaired and mutilated vision arising from internal (Ownership-Management) wrangling.
“Arik on the other hand, was not a candidate for a holistic turnaround. This is because, although Arik was plagued, like Aero with all the afflictions (external and internal, most cases self-inflicted)."
Aligbe noted that unlike Aero, what Arik needed was a laser beam on management, corporate governance and work culture that would appropriate all the positives to reverse the negatives.
The expert said he had no doubt that both Captains Roy Ilegbodu and Ado Sanusi were doing their best at Arik and Aero respectively.
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