The takeover of Arik and Aero by Asset Management Corporation of Nigeria (AMCON) has two classes of followers; a larger majority who sing the praises of the government agency for stepping in to rescue the airlines and a few who oppose AMCON. But as the arguments for and against continue, MR. JUDE NWAUZOR, Head of Corporate Communications at AMCON and a seasoned journalist in this interview with our correspondent insists that the voice of the opposition regarding AMCON intervention in Arik and Aero must be ignored because their arguments cannot stand to reason…excerpts
Recently your boss, the Managing Director/CEO of AMCON Mr. Ahmed Kuru made a strong case for strong regulation and institution of corporate governance for aviation sector in Nigeria. Is that an indication that AMCON will not exit Arik and Aero anytime soon?
I think it would be unfair to interpret his good intentions for the aviation sector that way. With our experience in aviation and the challenges that was discovered when AMCON intervened in the airlines, my MD was just calling on agencies that regulate aviation, which is a critical sector to go the extra mile by ensuring that players in aviation in Nigeria are guided by certain rules and regulations. His argument is that once we have strict regulation in that sector, it will be difficult for airlines to be run aground as frequent as we experience it in the country over the years. In the last 20 years, I am sure we have lost count of the number of airlines that have come and gone. If you have taken your time to read that speech, Mr. Kuru even proffered solution when he suggested that they (aviation regulators) need to make use of the same template the Central Bank of Nigeria (CBN) used and is still using to keep banks in Nigeria under check all year round.
In the banking sector, which I was also privileged to have worked for eight years before joining AMCON, you cannot act as you like; for instance all banks are expected to publish their financials at a particular time of the year, board meetings hold as at when due where major decisions are taken. In the banking sector before you hold certain strategic positions, the CBN gives you clearance so you cannot just appoint somebody because the person is your son-in-law. You also know that before you are granted banking license to operate a bank in Nigeria you will be required to deposit certain minimal capital base with the CBN depending on the area you want to play; be it regional, national or international. Aside the CBN, there is also the Nigeria Deposit Insurance Corporation (NDIC) on the other hand making sure risks are minimized in banking operations. That is why you see that most banks in Nigeria are doing well because major risks are averted well ahead. If the aviation industry is regulated in the same strict sense the CBN regulates banks, airlines in Nigeria would flourish better than they are doing currently. That was the point of the MD of AMCON.
So when exactly will AMCON exit from Aero and Arik?
The most important fact is that AMCON’s intervention in Arik and Aero has gone a long way to stabilise the airlines. The move as you are aware ensured that the airlines continue to provide critical services to the public thereby contributing to the country’s growth. AMCON’s intervention in those airlines if I must say it again, was timely and vital to the economy and growth of the two entities. For me, and please this is my personal opinion, the question should not be about when AMCON would exit, I think Nigerians should be more interested in what would be of the airlines at the time of our exit. AMCON as far as you want to know have positioned the two airlines on the path to recovery and profitability with thousands of jobs both directly and indirectly saved.
With the level of work we have done at the two airlines, the flying public on daily basis attest to the fact that there are remarkable positive changes at both airlines. I can also tell you that industry followers are impressed given the leadership that is currently provided at both airlines by Captain Ado Sanusi at Aero and Captain Roy Ilegbodu in Arik. Having said that, I want you rest assured that AMCON intervention in the airlines, which was by the way through the instrumentality of Receiver Management indeed stabilize the operations of the airlines. No doubt the development has put them in a position to generate positive cash flow, resolve their debt situation through either the owners paying the debts or the sale of the companies/underlining assets. Specifically, our intervention in Arik and Aero were intended to be value adding and non-destructive as I earlier stated. But on a lighter note, if you can settle the debts of the two airlines today, I am very sure we will exit almost immediately.
At the last May Day celebration, labour unions in the aviation industry in particular alleged that AMCON has not invested the funds needed to revamp Aero and Arik, which they took over when the airlines were going under. Is that assumption the true position of things?
That is not and can never be the true position. In as much as AMCON will not join issues with the aviation unions or anybody for that matter, it is not good to mislead the general public with highly deceptive comments such as that. Thank God you said in your question that AMCON took over the airlines “…when they were going under….” To begin with, if people can be sincere enough to look at things from a logical perspective, it takes money to keep something that is going under afloat. We know how capital intensive the business of aviation is so it is not possible to take over two airlines at the time we did without capital injection. It is not just possible.
Recall that the time AMCON took over Arik for instance most of the aircraft in the fleet were grounded, while others were on maintenance checks. There were backlog of unpaid salaries and all sorts of monies owed to other creditors among other factors. All that is history now because Arik has more fleet, backlog of salaries paid and the airline is running very well. You cannot achieve all that without injecting funds. It takes funds to rehabilitate grounded aircraft and put them back into operations. We have also injected funds in Aero, and over the period, the story has changed to positive, which was why the airline recently upgraded its Maintenance, Repair and Overhaul (MRO) facility at the domestic wing of Murtala Muhammed Airport in Ikeja, Lagos. In fact if you recall, they completed the first C-check on a Boeing 737-500 series at that facility earlier this year – in January to be precise. So it is wrong for the unions to make false declarations that cannot stand to truth or logic.
If AMCON has done all these for the two airlines, why do you think some people still think your corporation has not done much for the airlines?
Maybe the people who hold such opinions are better placed to answer that question. But one thing I know is that AMCON has saved two biggest airlines in the country from going under. Nobody can ignore that fact. However, it is not yet uhuru because it is still work in progress for us and all stakeholders who mean well for Aero and Arik. However, we are also in a democracy and people are entitled to their opinions no matter how crude, unguarded, rude, uncut or misleading. You cannot shut them up. But a forward-looking management that I serve at AMCON is determined to deliver the best for Nigeria and Nigerians as far as our recovery mandate is concerned. Therefore they are not deterred by side comments, especially when it comes from armchair critics who do not know what it takes to manage a difficult business such as an airline. So AMCON does not respond to mischief-makers and armchair critics because we are focused on our recovery mandate, which is a very difficult assignment, so we do not have spare time for armchair critics. Having said that, I must add here that we are a transparently open organization whose activities are guided by law and we act and will continue to act accordingly.
Finally when is Arik returning to UK and USA routes?
That is partly what I meant when I said it is not yet uhuru and it is still work in progress. Well I cannot give you a clear cut date of Arik‘s return to those destinations. That would be a serious business decision of management when the time is right. However, I am aware they weighing all the credible options and would make a strategic pronouncement in that regard, which I am sure will benefit Arik and all stakeholders when that decision is taken. I promise you will be the first to know.