The Asset Management Corporation of Nigeria (AMCON) has again proposed merging Aero Contractors (N2, Lagos) and Arik Air (W3, Lagos) into a new national carrier as a solution for the survival of the two airlines, which have been under the management of the government-owned entity since they went into receivership in 2016 and 2017, respectively.
Speaking at a media briefing in Lagos on August 26, new AMCON managing director and CEO Gbenga Alade said the corporation's previous management had first proposed converting Arik Air and Aero Contractors into a national carrier to former aviation minister Hadi Sirika, but the idea was rejected. "We will present it again because that is the best option. Unfortunately, the special purpose vehicle (SPV) created by the former management of AMCON for the conversion of Arik and Aero to a national carrier has been sold. But we can create another SPV," he was quoted by Punch newspaper.
Sirika had been pushing for Nigeria Air, a stillborn joint venture between the federal government and a consortium of Nigerian investors led by Ethiopian Airlines (ET, Addis Ababa International). The project collapsed following a change of government and legal action from five private carriers under the umbrella of the Airline Operators of Nigeria (AON).
Meanwhile, Alade expressed concern over debt issues at Arik Air. He revealed that the airline owes the African Export-Import Bank (Afreximbank) about USD52 million but has only negotiated to pay back USD8.5 million. He said AMCON plans to secure the airline’s operations with a bank guarantee to keep its three aircraft flying and expand operations to seven aircraft by February 2025. "We will stretch it so that three planes are flying now, and by the Lord’s grace, by February next year, we want to make seven planes fly for Arik," he was cited as saying by the Nigerian Tribune.
On July 30, the Nigerian Civil Aviation Authority (NCAA) grounded Arik Air's three remaining active aircraft for a week based on a Federal Supreme Court order regarding a USD2.5 million debt the airline owes to Atlas Petroleum International, the country's largest privately owned petroleum exploration and production company. The airline resumed flights on August 8 after new aviation minister Festus Keyamo and the NCAA brokered a deal between the airline and the creditor.
AMCON appointed a receiver manager to oversee the company's daily affairs in February 2017. Under AMCON's receivership, Arik Air's fleet shrank from 27 to just three operational aircraft. Shareholders expressed concern about the significant asset depletion and AMCON's failure to publish audited accounts, as mandated by a court order in March 2023.
On March 31, 2023, the Federal High Court invalidated the transfer of Arik Air's assets to NG Eagle (2N, Lagos). The lawsuit was filed by Arik Air co-founders Johnson and Mary Arumemi Ikhide in 2021.
Meanwhile, Aero Contractors CEO Ado Sanusi told the newspaper This Day he was not convinced about the proposed merger, noting that the two airlines' histories, origins, and current circumstances differ despite both being under AMCON management. He emphasised the importance of maintaining efficient logistics and urged the government to use skilled consultants to assess the merger's viability.
AMCON appointed a receiver manager to run Aero Contractors in February 2016 and took over a 60% majority shareholding in the company. Sanusi, who was appointed CEO in 2017, stabilised operations and turned the airline's fortunes around within three years, according to Nigeria's Daily Independent newspaper.