Aviation
FG, AMCON undecided over Arik, Aero Contractors airlines
The Federal Government is at the crossroads in deciding what to do with the duo of Arik Air, and Aero Contractors that are currently being managed by the Asset Management Corporation of Nigeria (AMCON).
Recall that AMCON took over Aero Contractors in February 2016, and a year later, also acquired the management and control of Arik Air over alleged gross mismanagement and huge debt burden in excess of N387billion.
The Guardian yesterday learnt that even AMCON, the government’s special debt recovery vehicle, had no inkling of the kind of fate that awaits the airlines after keeping their operations stable.
The situation leaves the government on the verge of having stakes in three airlines once the new national carrier, Nigeria Air, comes on board – a development experts have described as odd and untidy.
Meanwhile, the plan to float the Nigeria Air, may have suffered a setback, with delays in the release of initial funding for takeoff.
Sources revealed that the delay is not unconnected with President Muhammadu Buhari’s recent vacation, and alleged refusal of the Acting President, Yemi Osinbajo, to approve some requests made by the Minister of States for Aviation, Hadi Sirika.
The information directorate of the Ministry yesterday refused to speak on the funding issues. It also refused to remark on the situation where the airline scheduled for launch in December, has still not applied for an Air Operator’s Certificate (AOC), from the Nigeria Civil Aviation Authority (NCAA).
Meanwhile, AMCON, as the major creditor for Arik and Aero Contractors airlines, had said the takeover was to save the airlines from imminent collapse, and return them to profitability.
A top official at one of the airlines told The Guardian that AMCON had indeed delivered on its mandate of keeping the airlines running.
For instance, Aero Contractors re-strategised to divest into the resuscitation of its Approved Maintenance Organisations (AMO) facility, which has since commenced Maintenance Repair and Overhaul services for Boeing 737 classics aircraft. Similarly, Arik Air has sustained its local and regional operations since the takeover.
“If AMCON had not intervened, the two airlines would have collapsed and their assets sold. So, the takeover was aimed at protecting the employees, sustain the transport network and the economy too. That is exactly what AMCON had done.
“Yes, we have not been able to take it to the next level, but that is not part of AMCON’s assignment. If it were to do that, then it would have to start investing huge capital in the airlines, paying creditors and buying aircraft, among others. What to do with the outstanding and the airlines, nobody really knows for now,” the source said.
However, there are still the pending issues of workers’ benefits, indebtedness to various parties, and what to do with government’s stake in the airlines.
Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), at the their recent National Executive Council (NEC) frowned at the failure of AMCON to, in almost two years, honour the redundancy agreement , which ATSSSAN and other unions signed with the management of Aero Contractors in 2016.
Deputy General Secretary, ATSSSAN, Comrade Frances Akinjole, said while empathising with Aero management, criticised the refusal of AMCON to approve the settlement of arrears of salaries and terminal benefits of staff members declared redundant, saying: “the directive of is not only inhuman, but a breach of the terms of the redundancy agreement.”
In respect of the debt owed by the airlines, the Secretary General, Aviation Safety Round Table Initiative (ASRTI), Group Capt. John Ojikutu (rtd), said taking over the aircraft of Arik and Aero would have been a good option for government to use as its five per cent contribution to start the new airline. “But the debts of these airlines are not owed to government alone.”
“There are debts owed to banks, foreign technical service providers, etc. These could be sources of litigations on the new airline,” he added.
He observed that the national carrier was still within the 90-day window for AOC application and approval, adding that initial funding should not be the problem to force a setback on the whole agenda.
“I don’t think the bulk of the start-up money must come from the government, whose share is only five per cent. There are expected share funds from strategic investors, which I advise must be foreign technical investors with 40 per cent share, but which I am told has been increased to 50 per cent.
“I also expect 20 per cent share funds from Nigeria’s credible investors and the Nigerian public like you and I – 30 per cent. I expect the 36 states and the Federal Capital Territory (FCT) to take the remaining five per cent.
“Let me make myself clear again, the new national carrier is a public airline, and not a government or private airline. Therefore, the involvement of government now with the carrier is that of facilitator and not that of ownership. That position makes it different with that of the defunct Nigeria Airways, which was more or less a government airline or the Virgin Nigeria, which was owned by some political officeholders in and out of government,” Ojikutu said.
Olivier Arrindell, CEO of Ava Airways
Today, Amb Olivier E. Arrindell CEO of Ava Airways has announced and presented the master plan to Africa’s aviation industry stakeholders in Kinshasa. The aviation modernization and Airline master plans of connectivity between Africa and the Americas is vital for Africa business and trade connectivity between the Caribbean and Latin America. Many can remember most recently Amb. Arrindell declares these innovative plans of developments in Nigerian-based media and publishing company, Business Africa Online (BAO) magazine.
The plans are simple and particle from an investment point of view and this is why we have embarked on this profitable investment, nevertheless Olivier Arrindell is fully aware of the challenges that face Africa and the Americas business climate however increasing frequencies between Africa via Kinshasa Democratic Republic of Congo and the Americas with a sound structure will place our company in the vital need to connect the Caribbean and Latin America together. The Santo Domingo Hub base of Ava Airways is set and completed and in place.
Ava Airways is a passenger and cargo carrier company. It offers air transportation services to passengers. The company’s new fleet plan of Airbus A320 aircraft, Airbus A321 aircraft, and Airbus A350 aircraft shall offer a special service called Bliss for premium customers and also provides Av-Fi, an in-flight internet service. Other facilities that the company shall include are insurance assistance, inflight catering, non-alcoholic beverages, movies, television shows and in-flight radio service. The company focuses mainly on connecting the AMERICAS to the world.
Amadeus has signed a long-term, comprehensive technology partnership with EgyptAir. The deal is an extension of an existing relationship between the Egyptian flag-carrier and one of the world’s travel technology leaders and comes as the airline refreshes its digital offering ahead of a renewed period of growth.
Yehia Zakaria, chief executive, EgyptAir Group, said: “Amadeus is in a position to support EgyptAir throughout its digital transformation, allowing us to provide customers with a best-in-class travel experience. Once these advanced solutions, including a new digital e-commerce platform are fully implemented, our employees will have the freedom and flexibility to better serve our passengers around the world.”
Included in the deal is Amadeus Revenue Management, which accurately forecasts demand by analyzing customer purchase behavior, competitor pricing, and yield capacity. New digital solutions will also deliver a frictionless web and mobile experience to travelers while Amadeus Altéa Booking Intelligence will help minimize fraud. Finally, EgyptAir will migrate to a new loyalty platform, where members will benefit from customer-centric experiences based upon traveler insights.
Maher Koubaa, Vice President, EMEA, Airlines, Amadeus, said: “Amadeus has long been a trusted partner of EgyptAir and the renewal we have signed will extend the relationship for many years to come. It also deepens the connection, with the flag-carrier positioning itself for future growth in the Middle East and beyond, thanks to the digital upgrade and operational enhancements that this suite of innovative solutions will deliver for EgyptAir, its staff and customers.”
Amadeus continues to build its position in Egypt and the Middle East, with discussions ongoing with a number of other carriers in the region.
EgyptAir is the state-owned flag carrier of Egypt. The airline is headquartered at Cairo International Airport, its main hub, and operates scheduled passenger and freight services to 81 destinations in the Middle East, Europe, Africa, Asia and the Americas. EgyptAir is a member of Star Alliance.
Ava Airways CEO, Amb. Olivier Arrindell (Photo: Image Supplied)
The Airlines Reporting Corporation (ARC) has reported over $38 billion USD in airline ticket sales transacted between January and July 2022 in the Americas. Another estimated 20% of that revenue is booked outside the ARC. The best investment right now for the next fifteen years before the slowdown, would be within an airline that is based in the Americas with the right strategy and plans, said Amb. Olivier Arrindell.
The Global Diaspora Summit a few years ago was the culmination of a worldwide dialogue process among Africans on the continent and the Diaspora on the content, programs and plan of action for the AU’s Diaspora program. The outcome of the various consultations was consolidated by three African Diaspora Ministerial Conferences between 2007 and 2012 into a Draft Declaration to be considered by the Summit.
The African Union has approved the following definition of the African Diaspora: “The African Diaspora consists of peoples of African origin living outside the continent, irrespective of their citizenship and nationality and who are willing to contribute to the development of the continent and the building of the African Union.” With this being said our contribution is going to be in the form of consistent Air connectivity via commercial scheduled air transportation of passengers and Cargo between Africa and Central America/Caribbean.
The Americas population of over 1.2 billion and with 54% of the population being of African descent is the largest African diaspora outside of Africa and within emerging economies and strong economies.
Amb. Olivier Arrindell goal via Ava Airways is to implement the concrete ways and means of harnessing the abundant human and material resources in Africa and beyond. And to advance the Socio-economic development of both the Continent, in close and sustainable partnership with the African Diaspora in the Americas via Air connectivity. There are well established Air transportation agreements in place with some African nations and Caribbean countries. However, there is no adequate air transportation system between Africa and Central America/Caribbean and socio-economic development cannot take place. Therefore, Ava Airways as a company have already put in place all the necessary steps to prepare for the scheduled inaugural flight between mainland Africa and Central America/Caribbean via its hub in Santo Domingo.
A three-day business trip in Santo Domingo where you buy your goods followed by another four days in Ocho Rios or Montego Bay Jamaica on the beach sounds far more attractive then flying to the Middle East. However, Arrindell believes proper education must be provided about the Caribbean. He is very much positive about the near future because Ava Airways, as a company, are set fast on the course of economic connectivity.
Arrindell have concluded with the adoption in his last board meeting to include 11 major African cities into their master plan route network to provide Africa a gateway to the Americas that also include a visa free travel to some destination which will:
- Take concrete measures that would promote and sustain linkages between Africa and the Diaspora in the following priority areas: trade and investment, science and technology, travel and tourism, communication and transportation infrastructure, energy, information, communication technology and cultural industries;
- Ava Airways flights will enable the establishment of multi-stakeholder working groups of Africa, CARICOM, and Latin America citizens which will establish economic cooperation (including infrastructure of sea and air links, trade and investment, travel and tourism).
The near future of Air transportation between Africa, Central America/Caribbean is predicted to be extremely profitable to those who can properly connect Africa and the Americas with a business model that is innovative and has a clear understanding of the dynamics of our people.
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