• Lists gains of policy, says govt won’t invest a kobo
A PLAN by the Federal Government to designate Aero Contractors, one of the country’s leading airlines, as a national carrier is in the interest of the citizens, Managing Director and Chief Executive of the Asset Managing Company of Nigeria (AMCON), Mr. Mustapha Chike-Obi, has said.
Chike-Obi, who disclosed this to The Guardian in an exclusive interview, noted that the initiative would be a ‘win-win’ situation for the country as well as the asset company. According to him, AMCON holds 60 per cent equity in Aero Contractors as a result of the debt-to-equity deal arrangement over the airline’s Non-Performing Loans (NPLs).
AMCON, which was set up in the wake of the liquidity crisis which assailed the banking industry in Nigeria about four years ago, will divest its 60 per cent holdings in Aero Contractors and sell the shares to the public.
Describing any controversy over the planned designation of Aero Contractors as the national carrier as unnecessary, the AMCON chief stated: “The Nigerian government is not putting in a penny for instance. They do not own any share in the airline. The ownership remains 60 per cent AMCON and 40 per cent legacy owners. So, the notion that government is spending money to start a national carrier and all of that is baseless. That is not what’s happening. We on our own part at AMCON, we planned that soon as this thing takes off and it becomes a good thing and stable, we will sell our shares to the Nigerian public. So, in the end, you will have Nigerians owning what AMCON holds now because we are holding it in trust for the Nigerian people. It is not an issue of government spending money, buying new aircraft, running something. They are not running anything. The management stays. Nothing will change. It will be run like a private airline but will have all those benefits of being a flag carrier.”
Following the debt-equity deal with Aero Contractors, AMCON appointed a new chairman, managing director and chief finance officer for the airline.
But according to Chike-Obi, it is being run purely as a business entity and not government-owned airline.
He said: “Yes, we own it. But we don’t manage it. We keep an eye on the airline. We trust them (chairman, managing director and chief finance officer) doing their jobs very well.”
Giving insight into how Aero Contractors came to be designated a national carrier, Chike-Obi noted: “We heard that the Ministry of Aviation approached Aero Contractors to designate the airline as a national carrier. And so AMCON raised three questions for the Aero Contractors’ management. One, is this a good transaction for AMCON? Two, is it in the national interest? Is it a good transaction for Nigeria? And thirdly, are all the processes leading to these transactions transparent and clear?
“These three issues took our attention. They responded in writing on all these issues. So, I asked another question, what are the obligations that have been designated for these arrangements? The obligations are high level of professionalism. They will get a number of things on this. When you are talking of a national carrier, you get a lot of rights like the right of landing anywhere. So, you actually co-share with the other airlines.
“For example, you can make a partnership with another foreign airline so when they come to Lagos they can use their aircraft under what they call ‘a co-share’ to fly from Lagos to anywhere else. For example, Emirates can fly to Lagos. But they must fly back to Dubai. They can’t fly from Dubai to Lagos, then from Lagos to United States (U.S.) But if you co-share with a national carrier, they can actually fly to Lagos, take passengers from Lagos and fly to New York. And that I believe, on the ‘co-share’ of a national carrier, is of tremendous benefit to Nigeria.
“Then, all of a sudden you have many more planes if you partner the right people. You will have many more planes going to many more places if you partner the right people without having to buy planes. They have extra planes. We have the routes. We have the passengers. It would also help in making Lagos or wherever we designate as the hub of West Africa. So, it is a good thing for the airline and it’s a good thing for Nigeria. And we can see the benefits of the arrangement both for the airline and for Nigeria. So, once we are satisfied on the deal, we say go ahead.”
He then wondered why the planned deal should attract any controversy or dissent from any stakeholder, particularly given that it would also spur competition in the industry.
Chike-Obi explained why AMCON and Aero are silent about the processes leading to the national carrier.
His words: “You see, there is nothing to say yet. What has happened is that the Ministry of Aviation has approached Aero and said look, we want to designate you as a national carrier. These are the benefits. These are the implications. That is what has happened. What should Aero say to the public? There is really nothing to say. There are only two airlines that can be designated national carriers in Nigeria today – Aero-Contractors and Arik. I think Arik was approached at the beginning and it turned down the offer. So, Aero was then approached. You are not going to make an airline with three planes a national carrier. So, it was a very obvious choice. Now, they are discussing the matter at Aero and the ministry to see whether it works. When they reach agreements, am sure they will tell Nigerians.
“You must understand that we don’t micro-manage. We have very many companies we are working on. We have three banks to start with. We own 20 per cent of Union Bank. We own 13 per cent of Eco Bank. We own 10 per cent of Sterling Bank. We have many things we run. If we started micro-managing these institutions, I won’t have time to do my job. So, we trust the people in Aero to take the best decision. But we as fiduciary, we want to make sure that one, it is in our interest. That it is in the interest of Nigerians. We wrote a letter that everything should be done transparently.
“Once those things are settled, I am not going to tell them whether they buy 20 planes or more. I am not going to tell them what colour they have on their planes. I am not going to tell them what routes to fly. So, we actually do believe that when you put good people to manage things and let them manage them, we give them the targets and objectives. And if they don’t meet this we remove them. So, I believe the Aero management would do this transaction and we will take their words for it.”
He added that the establishment of a national carrier “is a way for Nigeria to reverse almost a decade of embarrassment.”
Source: Guardian
