Now, What Next for Arik and Aero As Government Foreclosures on Merger for National Carrier

Now, What Next for Arik and Aero As Government Foreclosures on Merger for National Carrier

First, I am very happy that Nigeria has killed the idea of merging Arik and Aero Contractors to form a national carrier. I read with pains as industry players were demanding for the merger to seed a national carrier.  Sure, Arik and Aero are largely under the control of the federal government through AMCON, the debt buyer, and could be taken over finally. I have no opinion on what to do with Arik and Aero, but I have a clear one on what Nigeria should not do: forget the idea of a national carrier!

The Federal Government has foreclosed the possible merger of two of the country’s local airlines, Arik Air and Aero Contractors Limited, into a national carrier, says Minister of State for Aviation Mr Hadi Sirika.

Sirika, who is on a country tour of aviation sector projects initiated by the Buhari administration, said in Lagos that the large indebtedness of the two local airlines to creditors as well as pending litigation in courts had forced the government into foreclosing the merger option as suggested and demanded by industry stakeholders.

[…]

“The suggestion that Aero and Arik Airlines, which are under the control of AMCON, should be merged to form a national carrier is not tenable as the national carrier would get entangled with the huge indebtedness of the airlines and other encumbrances,” Sirika said.

If you check, we cannot manage waterboards well – and FAAN (Federal Aviation Authority of Nigeria) has been unable to fix leaking roofs in our airports effectively. To think it is an airline that we can manage at this time, I have a bridge to sell to you. Nigeria should use any money it has for national carrier to improve our airports so that private sector participants can come onboard.

Port Harcourt is unfortunate, Owerri airport is largely gone, and Enugu airport is terrible. In some few ones in the north, you will pray that cattle will not STOP the planes on the tarmacs. Visit Kano airport and you cannot believe that is all we have for the great center of commerce.

Simply, fixing and upgrading our airports are where we need governments right now – not a national carrier that will surely collapse within five years.

And finally, what will government do with Arik and Aero now? Take them over – you will have more debts to service from the national budget. Leave them as they are – they will largely bleed to death! Tough decisions.

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The rate at which we produce comedians in the land, if half of them were to be thinking heads, we could lay claim to be one of the most efficient and upward nations in the world…

Almost 60 years after independence, it still feels like the colonialists left too early, because we have essentially failed to improve on what they left us with, even to maintain the very ones they left, we have consistently proven our inadequacies and how incapacitated we are.

We couldn’t manage government assets and businesses that are less cumbersome, they keep underperforming, and somehow our talking heads seriously believe that we can manage national carrier? It’s impossible for a country like Nigeria to run an airline profitably, we are simply not good enough in a business where profit margins are very small. Whatever that bewitched us must be very strong!

As for Arik and Aero, the solution to solving problem is not pouring more money into the problem, you could run out of money, while no improvement has been recorded. AMCON has more or less impoverished the Nigerian people, because most of what it buys are bad debts, with no chance of recovering any decent amount. We need to cut our losses by liquidating AMCON, it’s another business gone bad.

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