The Asset Management Corporation of Nigeria (AMCON) is considering a bold plan to merge Arik Air and Aero Contractors, two struggling airlines, to create a new national carrier for Nigeria. This proposal was revealed by AMCON’s Managing Director, Gbenga Alade, during a media session in Lagos.
Both Arik and Aero Contractors are facing significant financial difficulties, with massive debts they are unable to repay. Arik Air alone owes $52 million to Afreximbank. Despite these challenges, AMCON believes that a merger could provide a solution for the struggling airlines and offer a potential path to creating a truly Nigerian national carrier.
This proposal comes after the suspension of the controversial Nigeria Air project by the current aviation minister, Festus Keyamo. AMCON had previously suggested this idea, but it was rejected by the former aviation minister. However, with a new administration in place, AMCON plans to present the idea again.
The merger would require addressing significant debt issues and operational hurdles. Arik currently has only three planes flying, with hopes to increase to seven by February 2025. Additionally, both airlines are under AMCON management due to past debts.
AMCON’s broader strategy involves recovering nearly ₦5 trillion in outstanding debts. The corporation plans to hire experts to find hidden assets of debtors overseas and has already collected ₦100 billion from high-profile debtors in the past five months. AMCON is receiving backing from the President, Central Bank, and other key institutions.
The proposal to merge Arik and Aero Contractors is part of AMCON’s efforts to revive struggling assets across various sectors. The corporation is also working to resolve issues in the oil and gas sector, progress has been made with a major distribution company and a Kaduna power project in the power sector, and dormant assets in the telecommunications sector are being revived.
AMCON will present the merger proposal to the current administration and plans to address non-performing loans in Nigeria at an upcoming stakeholder conference. The coming months will be crucial in determining the future of Nigeria’s aviation industry and the broader economy.
If successful, the merger could solve multiple problems at once: rescuing two struggling airlines, creating a truly Nigerian national carrier, and potentially resolving the long-standing debate about Nigeria Air. However, the plan faces considerable challenges, and its success is far from guaranteed.
