The Senate Committee on Banking, Insurance and Other Financial Institutions yesterday reviewed the ugly details that crippled the operations of Arik Air and submitted that the intervention announced by the Federal Government last week was late and belated.
The committee, which however expressed support for the intervention noted that the airline could have averted the unfortunate situation if it had paid attention to issues of financial management and applied best practices fiscal management.
Chairman of the committee, Rafiu Ibrahim said the Senate had always stood in support of policies that would promote the welfare and living standards of Nigerians.
AMCON’s Managing Director, Ahmed Kuru, revealed that contrary to earlier claims, the troubled airline is owing AMCON N147 billion and other local banks to the tune of at least N165 billion adding that the foreign debts of the airline stood at $81 million.
The AMCON boss also told the committee members that the airline is owing over 2,000 staff seven months salary arrears. He said negotiations were currently ongoing on how to immediately resolve the arrears.
Kuru also revealed that of the 30 aircraft owned by Arik, only 10 were operational. According to him, the airline frequently relied on collection of ticket fees from passengers before they could buy aviation fuel. He partly blamed the incessant cancellation and delay of flight on its inability to buy aviation fuel.
Kuru, while dismissing claims that the Federal Government was planning to make the airline a national carrier, said it was too problematic for any government to handle.
He said within the next two to three weeks, the new management of the airline will put 15 to 16 aircraft back to the 18 nationwide routes.
He said: “Within the next two to three weeks, Arik Air should have up to 15 or 16 aircrafts flying. Arik Air cannot compete internationally.
They do not have the kind of services other airlines have.
“Despite all the things we have done to ensure that Arik Air stays in business, they have not done their part in meeting their own obligations.
“They have refused to pay salaries and also refused to ensure that their loans are repaid. We could not just sit back and allow an important airline with about 30 aircrafts and covers 55 per cent of all routes in Nigeria to go down. From the records, Arik makes over N7 billion annually.’’
Newly appointed chief executive officer of the airline, Mr. Roy Ilegbodu, who described the state of the airline as alarming disclosed that its performance stood at 15 per cent as against 25 per cent minimal requirement in the aviation sector.
Apart from AMCON, Arik is also currently indebted to Standard Chartered, Zenith Bank, Ecobank and Access Bank.
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