The Receiver Manager, Arik Air, Mr. Oluseye Opasanya, SAN, has said investors are interested in investing in Arik airline, contrary to media reports that the airline is being shunned by prospective investors.
The statement released in Lagos on Wednesday, which reassured the flying public that Arik in receivership is operationally sound, professionally run and safe and will continue to be a major and dominant carrier in the aviation industry reads in parts.
Explaining the position of events at Arik, Opasanya reiterated the fact that the appointment of a Receiver Manager (RM) [and new management team] by the Asset Management Corporation of Nigeria (AMCON) on February 9, 2017 was a measure that has saved the airline from doom and imminent collapse.
He recalled that when the Receiver Manager came on board on February 9, 2017, the airline’s status as a going concern was gravely threatened due to its poor management. The fleet, he affirmed was down to only eight serviceable aircraft, many of its assets were abandoned in different parts of the world while the maintenance hangar littered with unserviceable aircraft and related equipment.
He added, “Even some of the serviceable aircraft were due for various checks. Staff were owed between four to six months’ salary and staff morale was at the lowest ebb. Fleet insurance was due and the airline basically struggled to pay the premium. Vendors were owed colossal amount of trade debts to the extent that no oil marketer was willing to advance trade credit to the airline.
“The former management found it extremely difficult to pay for fuel and as a result flight cancellation was rife, on-time performance (OTP), which is a measure of an airline’s ability to meet scheduled flight time plummeted leading to significant customer attrition and loss of confidence.
“Furthermore, regulatory agencies were owed incredulous amounts of money and by way of example, passenger service charges impressed with trust collected on behalf of the government had not been remitted for several years. So also were huge sums of money deducted from workers’ salaries over many years which were not remitted to Pension companies. The flying public was equally owed several millions of Naira and foreign currencies on account of unflown tickets and cancelled flights.”
The legal luminary further disclosed that consequent upon measures taken post receivership, OTP, which had fallen abysmally to 19% a month before AMCON’s intervention, climbed up steadily and currently averages 63.5%. Cancellations, which were as high as 40% as at January 2017, has been significantly reduced to less than 4%. Average load factor is currently over 73% whilst aircraft utilization has also increased by about 50%. The statement also revealed that the shareholders of the company neglected the most basic requirement of airline operations by refusing to build up any maintenance reserve in support of the operations. Most regrettably, most of the aircraft and related assets fell due for heavy maintenance about a year into the receivership.
Again he said, “Without the benefit of maintenance reserves, Arik was inevitably confronted with a financial storm, which would have sunk the airline but for the help of AMCON and prudent management by the Receivership team. There has been a gradual increase in the number of serviceable aircraft as a result of huge investments in fleet maintenance. In the first and second quarter of 2018, the fleet serviceable planes increased to 13. The claim that the fleet of serviceable planes fell to three is patently false. The airline places a high premium on staff training to maintain its safety standards and meet national and international operational requirements. The management team has therefore ensured that staff undergo mandatory trainings, locally and internationally. Furthermore, all unpaid salary obligations have been paid while current salaries and pensions are paid/remitted as at when due.”
