Nigeria’s government took control of the country’s largest private airline operator Arik Airlines Thursday in a step authorities claimed was aimed at protecting investors and stave off mass unemployment.
Government-owned Asset Management Corporation of Nigeria (AMCON), a company originally set up by the Nigerian government in 2010 to help with troubled local banks, said in a statement the airline — which reportedly owes workers months of salaries — will now be managed by a team led by local aviation veteran Roy Ilegbodu.
“The development will afford Arik Airlines, which is the largest local carrier in the country, to go back to regular…operations, avoid job losses, protect investors and stakeholder funds as well as ensure safety and stability in the already challenged aviation sector,” AMCON said in a statement announcing the decision.
Tough economic conditions in Nigeria have made the past year a difficult one for the country’s aviation industry and the travellers they serve. America’s United Airlines opted to pull out of Nigeria last May, citing difficulties recovering dollar profits given Nigeria’s restrictive foreign currency controls at the time, while Emirates Airlines cut down on local operations in October. Local airlines have also struggled with long-running jet fuel shortages as, amid a dollar crunch, importers have been unable to maintain supplies. Aero Contractors, Nigeria’s oldest working airline, suspended operations indefinitely last September citing “grave challenges.” Two weeks later, Arik Air temporarily shuttered operations for a day, due to insurance debt problems.
AMCON says its takeover of the airline is down to its “heavy debt burden,” which has left the airline unable to pay staff salaries and aircraft leases. Part of AMCON’s objectives after taking over Arik Air is for the airline to “go back to regular and undisrupted operations.” The airline has gained a reputation for delayed and cancelled flights.
Arik Air has been dogged by financial woes that have led to disruptions of its operations and strikes.