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.
Congo Airways Orders Two Embraer E195-E2 Jets
Congo Airways Embraer Aircraft (Source: Embraer)
Just six months after their first E2 order, Congo Airways has placed a firm order for two E195-E2 jets. This is in addition to their existing two aircraft order for the smaller E190-E2. The four aircraft deal has a total value of USD 272 million at current list prices. This new firm order will be included in Embraer’s 2020 fourth quarter backlog.
Desire Bantu, CEO of Congo Airways said, “We see an opportunity in our market and the crisis we are all facing for Congo Airways to emerge stronger – which is why we are not waiting to place this further order. These new jets will allow us to extend our passenger and cargo operations regionally to high demand destinations such as Cape Town, Johannesburg, and Abidjan.
As we prepare for future success, we will have the flexibility, and the right sized, most efficient aircraft, to serve our customers as the market returns.”
“Africa has for too long been thought of as a market of mostly low frequencies and long thin routes. As airlines start ramp up their operations, the E2 family of aircraft is perfectly positioned to right size routes previously operated by narrowbodies, while keeping frequencies and adjusting capacity to new levels,” said Cesar Pereira, vice president of Europe, Middle East and Africa, Embraer Commercial Aviation. “Congo Airways will benefit from the flexibility provided by the common cockpit on the E2 jet family meaning their flight crews can transition seamlessly between variants.”
The E195-E2 will be configured in a dual class 120 seat layout, 12 in business, 108 in economy. An additional 25% capacity when compared to the 96-seat configuration chosen by Congo Airways for their E190-E2s. The E2 deliveries are expected to begin in 2022 with Embraer and Congo Airways continuing to review the potential to anticipate the beginning of the deliveries. There are currently 206 Embraer aircraft operating in Africa with 56 airlines in 29 countries.
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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