Again, 2 airlines battle to avert AMCON takeover

Again, 2 airlines battle to avert AMCON takeover

  • Sector is in crisis – AMCON
  • Blame FG, union leaders – Experts

Following the takeover of the boards and managements of Aero Contractors, and most recently, Arik Air and AOS Helicopters, by the Asset Management Corporation of Nigeria, there are strong indications that the Managing Directors and board members of two airlines may soon lose their jobs and stakes, owing to lack of corporate governance and rising debt profile.

With a combined debt portfolio of N350 billion, according to a debtor’s list obtained from the Ministry of Transportation, investigations by our correspondent revealed that the Managing Directors of the airlines were presently making frantic efforts to avert being hit by the AMCON hammer.

According to a top source in the Ministry of Transportation, the affected Chief Executive Officers are currently gripped with fear and are exploring their contacts in the Presidency to stem the impending takeover that may lead to their exit as well as loss of investments.

A top source in AMCON, while corroborating our correspondent’s findings, said that one of the airlines, which recorded debts to the tune of about N200 billion as at June 2016, was the first on the list with regard to the impending takeover, as AMCON might end up taking up about 60 per cent stake in the company.

He said, “Sincerely, the takeover ought to have been done at the same time with that of Arik. And this is an avoidable situation. We had warned the top management staff to cut down on allowances and other expenses made by the company, but all fell on deaf ears.

They reduced the salaries of junior and some senior staff but the management staff are still living large.

So, they have found it difficult to pay. “Some time last year, AMCON met with the management of both airlines and structured a payment plan. But they have both defaulted again on that plan. We have given the airlines a grace of two months to resume offsetting their debts, which will lapse at end of this month. Otherwise, they face a takeover like their counterparts.

We won’t allow their debt to rise to the level of Arik Air and Aero Contractors before we protect the airlines and the sector at large.”

Meanwhile, an insider source in one of the affected airlines, which was once suspended from operating about five years ago, confided in our correspondent that, as part of measures to avert the takeover, the Chairman, MD and some board members of the airline were presently canvassing for foreign investments.


“This is indeed a challenging period for the company, as the management is doing all it can, scouting for investors across the globe,” he said. Another airline on the radar of AMCON joined the industry in the early 1990s, with its main base in the Murtala Muhammed Airport, Lagos. Its air operator’s certificate has been withdrawn by the Nigerian Civil Aviation Authority, according to NCAA’s General Manager, Public Affairs, Sam Adurogboye.

The AMCON source, however, revealed that if the airline’s management failed to clear between 40 to 50 per cent of its N150 billion debt portfolio, the asset management firm might also be forced to clamp down on it.

To prevent the clamp down, find ings revealed that a team from the Ministry of Transportation had met with the management a couple of times, as part of its strategy to help ailing firms in the sector whenever it observed threats to the overall stability of the sector.

But a source in the ailing company told our correspondent that “the situation is so bad that three, out of six aircrafts, belonging to the airline that were flown abroad for ‘D Check’ maintenance are not back, because the company has not paid for the repairs. This is in spite of the fact that the company is making money.

The affected Chief Executive Officers are currently gripped with fear and are exploring their contacts in the Presidency to stem the impending takeover that may lead totheir exit as well as loss of investments

“There are situations where some supervisors earn more than managers in the airline, while some workers that are due for promotion have not been promoted for seven years. After several efforts to engage the management in a dialogue, some of the workers, who are our members, have been victimised and frustrated out of the organisation.”


The National Union of Air Transport Employees, the apex trade union in the sector, praised AMCON for its recent interventions in Aero Contractors and Arik Air, even as it alleged that most of the airlines’ managements, including the two mentioned above, were corrupt.

It attributed the huge debt owed by the airlines to fraud and lack of corporate governance on the part of their managements.

Aside from owing staff, the Acting General Secretary, NUATE, Comrade Olayinka Abioye, alleged that the management deducted tax and pension fund from its workers and failed to remit them to appropriate agencies.

“We have sent a warning letter to them that if half of the outstanding salaries are not paid by the end of the month, we would not hesitate to picket the companies.

We have also written several letters to the government for its intervention in their irresponsible behaviour, and we are still waiting for its response,” he added.


But experts in the aviation sector have, however, expressed fears over the future of the sector, as they passed a vote of no confidence on the Federal Government, its intervention agency, AMCON and NUATE.