Arik: Stakeholders blame regulator for airlines’ woes
Experts in the aviation industry have said that Arik Air and other
airlines’ travails should be blamed on the passive action of the Federal
Government through the regulator, the Nigerian Civil Aviation
Authority, in its oversight functions.
The Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (retd), said Arik’s problems had been single ownership; poor management structure, especially the absence of a management board; poor financial management and diversions of financial returns; divestment into other businesses; and recurring debts to major services providers.
He said better regulation and close monitoring would have helped to reduce some of the problems faced by the airline and others.
“It’s been long overdue. I recommended last year that government should assess the assets of Aero Contractors and Arik Air, and evaluate these against their debts, then take over the assets to start a new national carrier if there would be anything like that. The Nigerian airlines’ travails are single ownership and poor management structure,” Ojikutu added.
The President, Aviation Roundtable, Mr. Gbenga Olowo, said Arik’s case should not be treated in isolation as other airlines were also burdened, adding that the government had made the business environment difficult for operators in the industry through tax overburden and infrastructural deficit.
He said, “Gazetted policies that will enhance performance are not implemented. Credit facility is not found in the Nigerian business dictionary. Yet, aviation is prone to the minutest situation in the economy ranging from weather to politics.
“We saw the Arik takeover coming; the Aviation Roundtable’s first quarter breakfast meeting in 2016 appraised the very poor situation of Nigerian airlines and rose with an unambiguous communique on the way forward. Treating the Arik case in isolation will be to trivialise the magnitude of the problem.
“Going back to almost 40 years, the government airline, Nigeria Airways, failed; pioneer private airlines such as Okada, Kabo, etc. failed. Third generation airlines like ADC, Bellview, Chachangi, Sosoliso, etc. failed and the fourth generation Richard Branson’s Virgin Nigeria, Air Nigeria, etc. failed. Given the same Nigerian operating environment, the national carrier that has yet to be born will fail.”
Olowo added that the government had demonstrated lack of interest in businesses in the country over the years.
The General Manager, Public Relations, Nigerian Civil Aviation Authority, Sam Adurogboye, told our correspondent that the agency would increase oversight monitoring of Arik Air following the change in management.
“It is now up to the NCAA to monitor the airline. Once the receiver manager is qualified and knows what to do, there will be no problems. We are monitoring from our own end,” he said.
Copyright PUNCH.
The Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (retd), said Arik’s problems had been single ownership; poor management structure, especially the absence of a management board; poor financial management and diversions of financial returns; divestment into other businesses; and recurring debts to major services providers.
He said better regulation and close monitoring would have helped to reduce some of the problems faced by the airline and others.
“It’s been long overdue. I recommended last year that government should assess the assets of Aero Contractors and Arik Air, and evaluate these against their debts, then take over the assets to start a new national carrier if there would be anything like that. The Nigerian airlines’ travails are single ownership and poor management structure,” Ojikutu added.
The President, Aviation Roundtable, Mr. Gbenga Olowo, said Arik’s case should not be treated in isolation as other airlines were also burdened, adding that the government had made the business environment difficult for operators in the industry through tax overburden and infrastructural deficit.
He said, “Gazetted policies that will enhance performance are not implemented. Credit facility is not found in the Nigerian business dictionary. Yet, aviation is prone to the minutest situation in the economy ranging from weather to politics.
“We saw the Arik takeover coming; the Aviation Roundtable’s first quarter breakfast meeting in 2016 appraised the very poor situation of Nigerian airlines and rose with an unambiguous communique on the way forward. Treating the Arik case in isolation will be to trivialise the magnitude of the problem.
“Going back to almost 40 years, the government airline, Nigeria Airways, failed; pioneer private airlines such as Okada, Kabo, etc. failed. Third generation airlines like ADC, Bellview, Chachangi, Sosoliso, etc. failed and the fourth generation Richard Branson’s Virgin Nigeria, Air Nigeria, etc. failed. Given the same Nigerian operating environment, the national carrier that has yet to be born will fail.”
Olowo added that the government had demonstrated lack of interest in businesses in the country over the years.
The General Manager, Public Relations, Nigerian Civil Aviation Authority, Sam Adurogboye, told our correspondent that the agency would increase oversight monitoring of Arik Air following the change in management.
“It is now up to the NCAA to monitor the airline. Once the receiver manager is qualified and knows what to do, there will be no problems. We are monitoring from our own end,” he said.
Copyright PUNCH.
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