The $34 million down payment with Boeing Manufacturing can be used to revitalize the operations of the struggling Arik Air, the General Secretary of the National Union of Air Transportation Employees (NUATE), Comrade Ocheme Aba has said.
Aba also said that the total debt of N180 billion by the former managers of Arik Air far outweighed its N80 billion assets as at the time the Asset Management Corporation of Nigeria (AMCON) took over the airline in 2017.
Speaking with aviation journalists at the headquarters of NUATE at the Murtala Muhammed Airport (MMA), Lagos on Monday, Aba said that at present, there exists a $34 million down payment to Boeing for the purchase of aircraft, which has been lying fallow before the receivership of the airline in 2017.
The union leader said that by cooperation between AMCOM and the owners of Arik Air, the money could be released as part of the debt to the corporation.
According to him, the amount of money could conveniently bring back five aircraft that are out of service for the airline, noting that this would further boost the airline’s operations.
He declared that the acquisition of the aircraft would return the airline to a profitable mode by which its indebtedness would continue to rise.
Aba declared that the airline needed reasonable investment to remain in business and appealed to the founder of Arik Air, Mr. Joseph Arumemi-Ikhide to cooperate with AMCON to return the airline to profit.
Increase in Arik Air debt owed
He also stated that if the founder of Arik Air could pay off the debt owed to AMCON, the airline would be returned to the former immediately, lamenting that the debt of N180 billion at takeover had increased to N240 billion within six years.
According to him, the rise in debt to N240 billion was due to interest payable on the loan acquired by the former owner.
- “By cooperation between AMCOM and the owners, this money ($34 million) can be released as part of the debt to AMCON. The workers informed us that this amount can conveniently bring back five Arik aircraft that are presently out of service. This action alone will return the airline to the profitable mode by which its indebtedness can continue to journey up north.
- “As at the time of the receivership, Arik Air was indebted to AMCON to the tune of about N180bn, while its total assets value was about N80bn. This indicated that the airline’s debt far outweighed its assets. So, Arik was incontestably insolvent or, in more simple terms, bankrupt.
- “More significantly, all indications were that the owners did not show they were aware of the enormity of the problem, nor did they display any clues as to charting any path out of the quagmire. Rather, industry watchers were dumbfounded to find that the owners, having found themselves in a deep hole, were indeed continuing to dig; discretely seeking more loans and applying resources it did not have to elephant projects.”
What you should know
Aba also urged AMCON to relax its current stance of nil investment in the airline, maintaining that this policy was counterproductive to the corporation’s chosen path of turning the airline around.
He advised AMCON to put behind the “hurtful acts of the past administration,” which denied it the benefit of setting up the new airline of NG Eagle.
The union insisted that a new reinvigorated attitude towards the profitability of Arik Air by AMCON would serve the corporation in good stead and would also serve the larger interest of aviation, including the workforce.
- He added: “We consider that ultimately, the incoming Minister of Aviation will have to give due consideration with a view of fostering the needed synergy among all stakeholders to assure that the foregoing objectives are positively delivered in the interest of the owners, the receivers manager, the workers, other creditors of Arik Air, and the aviation industry at large. This is necessarily the duty of government.”