…says AMCON may liquidate Arik Air if NG Eagle’s AOC is not issued
Posted by Sade Williams
The National Union of Air Transport Employees (NUATE) , has called on the Presidency to intervene in the crisis brewing from non-issuance of Air Operator’s Certificate to NG Eagle, the airline being planned by the Assets Management Corporation of Nigeria (AMCON), saying only this will avert the crisis that could eventually affect the sector, especially the Nigerian Civil Aviation Authority (NCAA).
It particularly called on secretary to the Government of the Federation (SGF) and the Chief of Staff to the President (CoS) to urgently intervene in these matters and facilitate an immediate cease fire and chart a path to progress on the sensitive issues.
At a briefing at Lagos airport on Wednesday, the union said that although, the Association of Nigerian Aviation Professionals (ANAP) and the FAAN Branch of Nigerian Union of Pensioners (NUP) had urged the NCAA not to issue AOC to start-up airline, NG Eagle over fear that Arik Air was transforming itself to NG Eagle and would thereby escape its heavy indebtedness to FAAN and other aviation Agencies and that they insinuated that Assets Management Corporation of Nigeria (AMCON), the Receiver Manager of Arik Air, was using the assets of the Airline to float NG, the only quarter that can put a stop to a chaotic end of Arik Air and stop the desecration of the NCAA is the Presidency at this time.
The NUATE also explained that the issue of indebtedness of Arik Air to FAAN and the NCAA is only a smokescreen, adding that the real issue is the politics of a new national carrier.
“Indications are that there is the fear on the side of the Minister of Aviation that AMCON has positioned its new airline, NG Eagle, to metamorphose into a national carrier, whereas the Honourable Minister has been laboring for the past six years to create one which he has named Nigeria Eagle. As AMCON and the Ministry are both agencies of the Federal Government, there is clearly no possibility of the two airlines operating side by side as national carriers. The fear is that if NG Eagle succeeds, then the Nigeria Eagle project would be jettisoned. That means one of the airlines must bulge. This, we understand, is the crux of the matter.
“This does not in any way downplay the significance of Arik’s indebtedness to FAAN and others. If anything, it suggests that there is pressing need to find a solution to Arik’s heavy pile of debts. The above situation has pitted FAAN and NCAA on the one hand against AMCON on the other hand. NCAA and FAAN are parastatals of the Federal Ministry of Aviation, while AMCON is a parastatal of the Federal Ministry of Finance and is also supervised by the Central Bank of Nigeria (CBN). The two Ministers, the CBN Governor, and the heads of the other agencies are all senior officers of the Executive arm of the Federal government of Nigeria. Therefore, this executive fiasco alludes to failure of the executive to put its house in order. This unfortunately paints a picture of a government at war with itself. And if this war is not quickly brought to an end, we fear that the aviation sector of the national economy will suffer dire consequences, especially at this time that the sector is going through a burdensome grappling with the serious negative impact of the receding corona virus pandemic.
“The main purpose of this press conference, therefore, is to call the Presidency which is the apex of the Executive Arm of Government to duty over this serious malady in order to avert a major mishap in the aviation sector. In particular, NUATE hereby calls on the secretary to the Government of the Federation (SGF) and the Chief of Staff to the President (CoS) to urgently intervene in these matters and facilitate an immediate cease fire and chart a path to progress on the sensitive issues.
The union noted that it is already within the public domain that AMCON is presently executing a receivership management over Arik Air as ordained by a competent court since 2016 which came about by the Airline’s insolvency as a result of a heavy debt pile.
“At the last count, Arik Air’s debt burden is in the region of three hundred billion Naira, whereas the Airline’s assets are worth only about half of its total debts. What this means is that Arik Air is unable to pay its debts. And it cannot under any circumstances. This is a solid fact that cannot be altered by the denial of AOC to NG Eagle. The point here is that Arik Air, or AMCON cannot raise N19B being demanded by FAAN and the NCAA. And it is honestly unhelpful to create enmity with FAAN or NCAA for Arik Air or AMCON since the Airline will always need the support of the two Agencies to survive. Therefore, those proposing that AMCON’s NG Eagle’s AOC should be on hold until Arik Air’s debts are settled are only pushing AMCON to the wall; and that is towards liquidation. Considering the airline’s low worth compared to its huge debts, liquidation will bring about a chaotic end to Arik Air by which all parties will be losers. This should be avoided by all means’ , Comrade Ocheme Aba, General Secretary, NUATE, said.
NUATE said the intervention of the Presidency is needed to foster understanding on the issue of indebtedness of Arik Air to FAAN and other Government agencies with a view to aiding AMCON to continue with its rescue efforts in the Airline which is the best option for now to safeguard all interests.
It noted that denial of AOC to NG Eagle will shut out twenty thousand potential jobs for Nigerians, together with the opportunity for reasonable number of Arik Staff to migrate to the new Airline, adding that this would be very unfortunate indeed. The pleaded intervention by the Presidency will avert such a catastrophe.
NUATE explained further that one of the biggest casualties of this imbroglio is the apparent desecration of the holiest place in aviation, the NCAA, being the regulator of the industry.
It noted that political actors have ceased the stage to interfere and dictate to the Authority on whom to and whom not to issue certificates, adding that this has thoroughly denigrated the NCAA and whittled its autonomy or independence granted by the Nigerian Civil Aviation Act.
“If this farce succeeds and NG Eagle is denied AOC despite meeting all requirements, but forces outside NCAA says otherwise, it would be a dangerous precedent capable of tumbling the entire industry and wiping out all the gains in safety and international recognition achieved over the past years.
“Therefore the intervention of the Presidency is urgently needed to avert the flight of integrity out of the NCAA processes by assuring that only technical issues stated by Nigerian Civil Aviation Regulations (NCARs), as have been already met to our knowledge, dictate the issuance of AOC to NG Eagle. In our humble view, the stakes are too high for our Nation to allow individuals’ interest to jeopardise national interest, especially as another round of International Civil Aviation Organisation (ICAO) Safety Audit and United States of America Category One certification beckon.”, it noted.