…How Capt. Fola Akinkuotu failed to resuce the airline
…how the Ibru family contributed to the disgraceful nature of the airline
After over five years of been in murky waters due to the diversion of funds and inflation of aircraft price by it’s the management, Aero Contractors has finally announced its plans to suspended flight operations from Thursday, September 1, 2016.
The airline, which was taken over by the Asset Management Company of Nigeria (AMCON) took the decision when its current management led by Capt. Fola Akinkuotu as the Chief Executive Officer (CEO), could not rescue the airline from going further down.
A source close to the airline told SaharaReporters that AMCON debt in the troubled airline has grown to N20 billion from the initial N11 billion in 2011 when AMCOM took it over.
The source said that with the initial N14 billion, AMCON had 60 per cent shares in the airline and with the current N20billion, the source said AMCON had completely taken over the running of the airline and decided to liquidate it.
Besides, the source noted that the Federal Government through AMCON had engaged the services of a reputable accounting firm to undertake a forensic audit of the airline’s accounts in the past five years and eventually liquidate it.
The airline has over 1,000 staff including engineers and pilots. The airline before 2011 crisis and AMCON take over, had about 18 aircraft and multiple helicopters, but as at July this year, the fleet has depleted to only two aircraft.
The source added that part of the documents used for audit of the airline and its eventual collapse were submitted to AMCON by two leading industry unions; the National Union of Air Transport Employees (NUATE) and the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) who had exposed some shady deals in the airline in recent times.
The documents submitted to the government by the unions alleged that the immediate past management and board members of the airline who are predominatly members of the Ibru family contributed in no small measures to the deplorable condition of the airline.
The unions purported further that Oceanic Capital, a consultant to the airline acquired seven planes in which only six were delivered and leased them back to Aero through Oceanic Leasing Company of at $12m each.
But, the unions said that rather than the $12m claim by the Oceanic Capital, the website of the aircraft firm, Arizona where that the aircraft were purchased for $4m each.
The documents used against the management by the government added that the past administration paid $250,000 twice in favour of one “Bayo” for negotiation and finalisation with AMCON, which also reflected on its invoices as a general vendor for consultancy fees.
On the suspension of flight operations, Akinkuotu said the development was part of the strategic business realignment to reposition the airline and return it to the part of profitability.
Akinkuotu in a statement by the airline’s media consultant, Mr. Simon Tumba said the business decision, which was a result of the current economic situation in the country, has forced some other airlines to suspend operation or outrightly pull out of Nigeria.
In the case of Aero, Akinkuotu said the airline had faced grave challenges in the past six months which impacted its business and by extension scheduled flight operations. These factors, according to him are both internal and external environmental factors that have made it difficult for the leading airline to continue its scheduled services.
He said during the period under review, Aero, which was hitherto revered for its safety, timeliness among other virtues witnessed epileptic operations and services to public that are caused by non-alignment of fundamental issue of the business, which in some cases have been frustrating and embarrassing to all parties including staff, customers and indeed all stakeholders.
As part of its resolve to ensure the airline survived unlike most other carriers that experienced short life span in the country, AMCON had appointed Mr. Adeniyi Adegbomire SAN as Receiver Manager on February 6, 2016, with the aim of turning the airline around.
Since AMCON’s intervention in Aero Contractors in 2011, it has provided support for the airline to meet working capital requirements and fleet expansion. These were to ensure that the airline remains a going concern providing services to various clients and the general public.
Unfortunately, the operating environment within and outside the airline have hindered any possible progress, especially in the last six months when the Naira depreciated against the dollar thus making it impossible for the airline to achieve its operational targets.
With these realities coupled with protracted engagements with all relevant stakeholders, the Management of Aero has strenuously reviewed and assessed options and opportunities on ensuring viability, safety, and sustainability of operations during the period with a lot of sacrifices.
“The impact of the external environment has been very harsh on our operational performance, hence management decision to suspend scheduled services operations indefinitely effective September 1, 2016, pending when the external opportunities and a robust sustainable and viable plan is in place for Aero Contractors to recommence its scheduled services.
The implication of the suspension of scheduled services operations extends to all staffs, directly and indirectly, involved in providing services as they are effective to proceed on an indefinite leave of absence during the period of non-services,” the Chief Executive Officer stated.
He added that “We are aware of the impact this will have on our staff and our highly esteemed customers, hence we have initiated moves to ensure that we can return to operations within the shortest possible time, offering reliable, safe and secure operations, which the airline is known for.”
