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.
Ozow partners FlySafair to improve air travel access for millions of South Africans
Thomas Pays, Co-Founder and CEO of Ozow
A new partnership between digital payments company Ozow and leading local airline FlySafair is making it easier than ever for South Africans to purchase flight tickets.
According to Ozow co-founder and CEO Thomas Pays, the vast majority of South Africans have no credit cards and require alternative means of purchasing goods and services online. “There are more than 49 million bank accounts but only eight million active credit cards in South Africa. This poses the threat of locking millions out of digital and financial services. As an impact-driven and market-led company, Ozow is at the forefront of developing products, services and partnerships that enable greater digital and financial inclusion for all consumers and businesses. The partnership with South Africa’s most innovative and consumer-friendly airline is one more step toward this goal.”
Kirby Gordon, Chief Marketing Officer at FlySafair, says: “We’ve always respected the need to offer customers without credit cards various options to make payments both online and offline. We’re pleased to have partnered with Ozow who offer a safe, reliable and easy-to-use option for our customers.”
While airlines have been grounded and air travel limited since lockdown was first implemented in March 2020, South Africans generally love to fly. In 2017 alone, the Airports Company of South Africa tracked more than 40 million passengers traveling through the country’s nine largest airports.
Pays adds that the two companies share a commitment to ensure their services are accessible to all South Africans. “As a business, we work to break down barriers that keep more consumers from enjoying the benefits of digital payments. Cash remains the most expensive and least secure method of payment, but most South Africans still rely on cash payments for most of their purchases. By partnering with likeminded, consumer-led businesses such as FlySafair, we can accelerate the decashing of the South African economy and bring digital and financial empowerment to all South Africans.”
iFly Aviation Takes Young Aviators And STEM Program To Uganda
Kampala, Uganda: iFly is an aviation enterprise which is dedicated to bridging the gap between industry and community through inclusive youth empowerment programs. Our core focus is social innovation in Aviation, Science, Technology, Engineering, Mathematics (STEM) and driving our initiatives alongside key stakeholders in order to facilitate and enable the next generation.
Our purpose is to elevate learners by empowering them, motivating and giving insight into opportunities that exist within the aviation industry and educating them along the way. As part of our efforts to drive our initiatives across Africa as to create a pan African movement, we have recently launched our programs in Uganda, this being the second country after South Africa.
We hosted our first event at Nakasero secondary school in Uganda, to the delight of over 200 students. They were exposed to motivational talks including insights into aviation and its various opportunities. We had a flight simulator session where the students got exposed to a computer based flight simulator in order to see and learn first hand what happens in the cockpit during flight.
The event was also complimented by a first of its kind engine building project, an initiative of the Rolls Royce STEM program. Through this workshop, students got to build a 3D model Trent engine, the likes of which powers the Boeing 787 Dreamliner and Airbus A350, 2 of the most popular wide body airliners in the world.
Our goal a to have such programs running across the continent and we would Like to invite any like minded and passionate people across Africa to join us as ambassadors and adopt iFly STEM under our blue print in their respective countries. We sincerely appreciate our ambassadors in Uganda for pulling off a successful first event. David Ssenkungu, Derrick Talemwa, Peter Mwesigwa and Hosea Datari.
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SAA to address CEO Vuyani Jarana’s resignation, outline future plans
Picture: ANA/Ayanda Ndamane.
JOHANNESBURG – The board of South African Airways (SAA) and its executive management will on Friday take the nation into their confidence about the state-owned airline’s current and future plans in light of Vuyani Jarana’s resignation as CEO.
In a terse statement on Thursday, the leadership of the airline said it would like to put certain matters into perspective and assure its customers, the markets and stakeholders about business continuity and commitment to the implementation of the airline strategy.
Jarana tendered his resignation last week as group chief executive, citing the airline’s mounting debt due to uncertainty about funding and lack of support from government as a shareholder in implementing the airline’s long-term turnaround strategy.
In his leaked resignation letter, Jarana said that a big chunk of the R5 billion bailout SAA received from government for the 2018/19 financial year had been used to pay creditors up to the end of March 2018, to the point that the airline on three occasions was on the brink of not paying salaries.
“We have not been able to obtain any further funding commitment from government, making it difficult to focus on the execution of the strategy,” Jarana said.
“I spend most of my time dealing with liquidity and solvency issues. Lack of commitment to fund SAA, is systematically undermining the implementation of the strategy, making it increasingly difficult to succeed.”
The board of SAA accepted Jarana’s resignation, saying that he had spearheaded the implementation of the long-term strategy to return the airline to financial and operational sustainability and position it to deliver effectively on its mandate since he joined the airline in November 2017.
But workers under the SA Cabin Crew Association have slammed the airline for making Jarana’s life difficult, saying that he had, through consultation and transparency, managed to get the buy in of cabin crew at SAA into the long term turnaround strategy and his clear plan to revive the carrier’s fortunes.
The workers have even threatened to go on strike to have Jarana reinstated as SAA chief executive.
African News Agency (ANA)