The Nigerian government, through AMCON, is considering merging debt-ridden Arik Air and Aero Contractors to create a national carrier. This strategic move aims to address the airlines' financial challenges and ensure operational stability. The merger proposal, initially rejected, is now being revisited as a viable solution for Nigeria's aviation sector.
The Asset Management Corporation of Nigeria (AMCON) is considering merging Arik Air and Aero Contractors to create a national carrier, primarily due to their significant debts. AMCON's Managing Director, Gbenga Alade, revealed that this proposal was previously rejected by a former aviation minister but is being reconsidered as the airlines struggle with their financial obligations.
Alade emphasized the critical situation, especially for Arik Air, whose debts are so severe that they might not be repayable. He expressed concern about the ongoing stress this issue has caused, particularly since Arik owes $52 million to Afreximbank, with a proposed settlement of only $8.5 million. However, the source of the settlement funds remains uncertain.
Alade also mentioned that a special purpose vehicle (SPV) initially set up for converting the airlines into a national carrier was sold off. Despite this, AMCON is prepared to establish another SPV to facilitate the merger.
He voiced his opposition to a suggestion of taking Arik's engines as a final settlement, as it would cripple the airline. Instead, AMCON is working to keep Arik operational, with plans to increase the number of flying planes from three to seven by February next year.
