As the Asset Management Corporation of Nigeria (AMCON) prepares for a winding down of its operations, aviation enthusiasts are closely scrutinizing its significant influence on two major players in the Nigerian aviation industry: Aero Contractors and Arik Air.
Aero Contractors, a venerable airline with over six decades of history, was on the brink of extinction before AMCON’s intervention.
Plagued by mismanagement and financial woes, the airline faced bankruptcy due to costly acquisitions of aging aircraft.
In February 2016, AMCON stepped in to rescue Aero Contractors, absorbing its debts and striving to rejuvenate it.
Under the leadership of Captain Ado Sanusi, Aero Contractors rebuilt its Maintenance, Repair, and Overhaul (MRO) facility, becoming capable of performing C-checks on Boeing B737 aircraft.
Today, the airline is gradually regaining its strength, with plans to expand its fleet to four aircraft by September.
While AMCON still holds a 60% stake in Aero Contractors, it no longer provides funding. The expectation is that AMCON will divest its shares before winding down its operations, potentially opening opportunities for new investors to support the airline.
In contrast, AMCON’s management of Arik Air has been a contentious issue. Critics argue that AMCON lacked the expertise to oversee the airline effectively, resulting in its decline.
Renowned lawyer and activist Femi Falana claimed that AMCON’s mismanagement led to the loss of valuable assets and incurred fraudulent debts of around N120 billion. A comprehensive investigation by the Economic and Financial Crimes Commission (EFCC) into Arik Air’s affairs highlighted these concerns.
The future of Arik Air, once Nigeria’s largest airline, remains uncertain. While its founders have sued AMCON over its management, many believe government intervention is necessary to ensure the airline’s survival.
The broader debate around AMCON’s actions revolves around the impact on investment in Nigeria. Critics argue that the agency’s approach, which sometimes led to the decline of companies, discouraged investors.
Nonetheless, AMCON maintained that its interventions prevented the complete collapse of several firms.
As AMCON heads towards its wind-down phase, a change in leadership is expected, with a new “Sole Administrator” tasked with overseeing the agency’s closure. This move will likely reignite discussions about the fate of companies affected by AMCON’s actions.
In its more than ten years of existence, AMCON has recovered approximately N1.6 trillion from debtors, addressing a significant portion of Nigeria’s debt challenges.
However, the legacy of AMCON’s interventions, especially in the aviation industry, continues to raise questions about the balance between debt recovery and industry sustainability.