National Carrier: Kuru’s Proposal Attempt To Truncate Nigeria Air Project—Aligbe

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…Urges Aviation Minister To Ignore Him, Move On

 

The Managing Director of Belujane Konzult, Mr Chris Aligbe has stated that proposal by Asset Management Corporation of Nigeria (AMCON) to the National Assembly that the Minister of Aviation should merge Arik and Aero and to become Nigeria’s national carrier is an uncanny step to truncate the Nigeria Air Project.

This is just as he called on the Minister of Aviation, Senator Hadi Sirika to ignore Kuru and his AMCON and move on.

Aligbe’s reaction is coming on the heels of the suggestion made to the National Assembly by the Managing Director of AMCON, Ahmed Kuru during his budget defence asking them to convert Arik Air and Aero to national carrier instead of starting a brand new one, which has been on the works for the last four years.

The aviation consultant stated that before now the challenge was that many stakeholders were not convinced of the need for a new national carrier but that stark realities of Nigeria’s losses in terms of humongous capital flight of over $1.3 billion annually on ticket sales alone by foreign airlines coupled with the fact that countries such as Uganda, Tanzania and Ghana, even Republic of Benin are set with the floating their national carriers with varying degrees of government equities have undermined the position of some stakeholders, who hitherto argued that national carriers are now out of fashion.

Speaking further, Aligbe said that this coupled with the fact that, try as they may, the collective operational strength and effort of Nigeria’s domestic airlines have proven grossly inadequate, albeit and unable to provide an anchor for redemptive hope.

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He contended that today virtually the entire industry and, indeed, the vast majority of stakeholders are either clamouring for or desirous of a befitting national carrier.

“At least now, after many years of cacophony of clanging ideas, we have moved a step or two forward towards the quest for redemptive action in the airline sub-sector. We are no longer arguing whether or not, but rather, what will be the nature of the desired national carrier. Even AMCON, whose authorities did not support the idea when it acquired Aero and Arik, today, wants to key into the idea, though to achieve a corporate, rather than national motive.

“There are still a few who believe that Aero and Arik are airlines that belong to the government. It is not true. If they were, they would be under Aviation, not AMCON that has no statutory responsibility on aviation but rather on debt collection. Any attempt to move outside this statute will occasion international litigations that could be unresolved for many years. This is because both the original owners and creditors will head to court to challenge the Federal Government.”

The Belujane Konzult boss said that the idea of merging two airlines which the proponents have acknowledged “are not doing well” to form a new national carrier is fraught with so many intractable challenges which according to him make the product a disaster abinitio.

He argued that some of the pertinent questions that should be asked are

  • Can any healthy and virile establishment be founded on the back of unhealthy and struggling entities?
  • Will any sensible investor invest in such an establishment?
  • Where no investors come, such a national carrier will exist on 100% government equity, just like the liquidated Nigeria Airways.
  • Have we so soon forgotten the bane of Nigeria Airways?
  • Can AMCON’s liabilities from Aero and Arik, vicariously or inferentially, be assigned simpliciter to the Federal Government? Ditto the assets?
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Speaking further, he said, “Have AMCON and Supporter – Proponents stopped to consider the “Outline Business Case” (OBC) of its proposition on the use of Aero-Arik merger to float a national carrier? I ask this because, in our present dispensation, all such Proposals/Promoters must first submit an OBC to the Infrastructure Concession and Regulatory Council (ICRC) for evaluation, guidance, and approval. For those who are not aware, the Nigeria Air national carrier project had gone through this process, passed two to three approvals by the Federal Executive Council (FEC), successfully concluded the Development stage and was at the Procurement stage in compliance with ICRC approvals and guidance.

“In the entire three-year period of due process, Arik and Aero were never in consideration. AMCON’s proposal is, therefore, an unnecessary distraction at best and, at worst, an uncanny step to truncate the Nigeria Air Project. Kuru took his proposal to the National Assembly, having failed to secure consent from the Ministry of Aviation. Was it in good faith? Or any attempt to arm-twist? Any which way, the NASS has no statutory/constitutional right to compel the Ministry’s acceptance of Kuru’s fantasy. I wish public officials should know and act within statutes. Kuru’s push is outside the oversight role of the NASS.”

Continuing, he said, “First, is Kuru sincere in his avowal? What are his indices of Arik’s profitability? AMCON took over Arik with 15 aircraft. How many aircraft has the airline now? What is the debt profile of Arik as at today? How much has AMCON recovered since it took over Arik. What is the operational status of Arik in terms of route network and schedule integrity? What about maintenance integrity which Arik had the highest rating on before AMCON’s takeover?”

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AMCON, he said cannot just take us for a ride by telling us at the National Assembly that “Arik and Aero are now positioned for profitability.

He asked AMCON to publish its score-card to show the “great success” it has achieved.

In his words, “I dare AMCON to do so because, as of today, what is known is that Aero is keeping faith and in about four years’ time, it’s close to N30 billion outstanding debt will be paid off while Arik is not anywhere close.”

 


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