The Federal Government may soon merge Arik Air and Aero Contractors to form a national carrier, according to the Asset Management Corporation of Nigeria (AMCON). This proposal, presented by AMCON’s Managing Director/CEO Gbenga Alade, comes in response to the massive debts owed by both airlines, which may render them unable to meet their financial obligations.
During a media briefing in Lagos on Monday, Alade disclosed that the idea of converting the struggling airlines into a national carrier had been previously proposed to the former Minister of Aviation but was rejected. However, AMCON plans to revive the proposal, seeing it as the best option to salvage the situation.
“The former management of AMCON suggested converting Arik and Aero Contractors into a national carrier, but the former aviation minister didn’t support it. We plan to present it again because it remains a viable solution,” Alade explained.
He also highlighted the financial woes plaguing both airlines, particularly Arik Air, which is currently grappling with significant debts. The airline owes around $52 million to international creditors, including Afreximbank, which recently negotiated to settle the debt for $8.5 million. However, AMCON is struggling to secure the necessary funds to meet this demand.
Arik Air and Aero Contractors have both faced severe financial difficulties over the years, leading to AMCON’s intervention. In 2016, AMCON took over Aero Contractors’ management and dissolved its board. A year later, it similarly took control of Arik Air after the carrier failed to honor its debt obligations, which run into several billions of naira.
The Nigerian government’s plans to establish a national carrier, Nigeria Air, have faced multiple setbacks, including legal challenges and controversies over ownership. The project was recently suspended by the current Minister of Aviation, Festus Keyamo, who criticized the previous arrangement, which allowed Ethiopian Airlines to hold a 49% stake in the airline.
With the future of Nigeria Air uncertain, AMCON is revisiting the option of merging Arik Air and Aero Contractors as a potential solution. The agency remains hopeful that this move will help stabilize the aviation sector and prevent further financial deterioration of the airlines.
AMCON’s CEO also touched on broader efforts to recover debts and revive key assets across various sectors, including oil and gas, power, and telecommunications. He emphasized the importance of these efforts in boosting production, generating foreign exchange, and creating employment opportunities in Nigeria.
As the situation evolves, the possibility of a new national carrier, born from the union of Arik Air and Aero Contractors, could mark a significant shift in Nigeria’s aviation industry.
