…Shareholders React to Takeover Plan
(Lagos) – Reports that Ethiopia Airlines has indicated interest in signing a contract with the Nigerian government to take over the management of its largest domestic airline, Arik Air, is not going down well with the shareholders and they are wondering whose interest the deal will serve.
The country’s bad bank, Asset Management Corporation of Nigeria (AMCON), took over from the owners in February this year due to huge debts owed by the later to both the government agency and commercial banks.
Shareholders are moaning the carrier’s predicament and faulting the takeover in the first place. And for them, the talk of selling to Ethiopian should not even arise. According to those who are very familiar with the matter, Arik Air, a wholly owned Nigerian company operated without hitch for 10 years.
It started when naira was 150/$1 and fuel was 97 per litre and managed without any significant increase in fares, it survived for 10 years in a very hostile operations environment, paying loans it obtained in USD and salaries to over 2000 employees.The company ran into heavy clouds as the economy went into recession and next line of action was for AMCON to take it over and now hurrying to hand it over to a foreign company that will sack most of the indigenous staff of the airline,” Senator Okon said.
The company ran into heavy clouds as the economy went into recession and next line of action was for AMCON to take it over and now hurrying to hand it over to a foreign company that will sack most of the indigenous staff of the airline,” Senator Okon said.
The company ran into heavy clouds as the economy went into recession and next line of action was for AMCON to take it over and now hurrying to hand it over to a foreign company that will sack most of the indigenous staff of the airline,” Senator Okon said.
Experts had hinted at the time that what the young airline needed at the time of the takeover was a bailout, a reasonable financial intervention that would help it weather the financial storm it was embroidered in. But the banks and their regulators wanted their money and the government would an airline is caged than see banks bleed for it.
But the plan to acquire Nigeria largest carrier, Arik Air by East Africa airline, Ethiopia Airlines doesn’t seem to go well with the shareholders. Describing it as unfortunate, and a ploy by the Nigerian Federal government to hand over the airline to the foreign operator.
The former Vice President of the airline, Senator Anietie Okon said the planned takeover by Ethiopia Airlines was not coming as a surprise because the shareholders had been aware that the East African airline had been lobbying to take over the management of the largest airline in the country and had a foothold to exploit the Nigerian domestic air traffic market.
He excoriated the “level of lack of patriotism and shamelessness by some people in government offices” and described it as “appalling and desecration of national decency and honor.
I really will not blame Ethiopian. The aviation industry is losing Nigerian workers every day because the domestic airlines are dying. This is an industry that is projected to employ about 9.7 million Nigerian if well managed but everything is being handed over to foreign companies that will sack our people,” Okon said.
He remarked that given a homegrown business that had run consistently well to the pride of country; it would be an aberration for the government not to establish the real reasons why the airline went under.
Advising that the government should look at why Nigerian airlines don’t survive for a long time. “They should look at their policies and operating environment in the country, which to us is an indictment of the country itself. It’s further complicated by the fact that Nigeria generates the traffic that even all regional carriers including the famous Ethiopia Airlines depend on in West and Central Africa. Now you will surrender your own airline to a foreign competing airline that had suggested the liquidation of the same entity. This raises more questions than answers,” Okon added.
He stressed that Arik was instrumental to Nigeria attaining US Federal Aviation Administration (FAA) Category 1 Safety Status and cultivated long relations with US Exim Bank.
With additional reports from Thisday
