Random thoughts on Amcon, Nigerian Eagle, Arik and Aero Contractors. A Thread @AnthonyPatrickO @NigeriaAirTips @ChidozieMario @airbusskipper_ @tsh_tsh89 @Gunsmoker477 @AviationInNGA

Recently, Asset Management Corporation of Nigeria recently announced that it was going to launch a new international airline start-up called Nigeria eagle, using aircraft belonging to Arik Air and Aero Contractors. The new airline is scheduled to commence operations by June 2021.

Processes to commence demonstration flights have already been concluded. The airline plans to focus on domestic flights. Captain Ado Sanusi has been primed to be the managing director of the new airline. He was the former managing director of Aero Contractors before he finally

left earlier in the month. However, the new airline has raised legal and other appurtenant issues. Will the new airline take over Arik and Aero? Is AMCON in any discussion with the original owners of the airlines?

Does AMCON has the power to convert planes belonging to the airlines to its new airline? AMCON took over Arik Air on the 8th of February 2017. At the time of the takeover,

it did not continue with the plan of the previous management's plan to carry out maintenance checks on the airplanes that were due for maintenance. Some of those planes needed landing gear replacement and other maintenance issues.

AMCON’S intention was to transform Arik into an airline that can be partnered with or sold as a precursor to the establishment of the proposed national carrier. However, due to the huge debt profile (Arik is indebted to the tune of N300bn), the airline could not serve the purpose

and is easily prone to litigation. In addition, there are pending suits against AMCON by the founders of the airline. The founders of the airline in September 2017 filed a suit against AMCON over its decision to take over the airline. It also sued AMCON and Ethiopian Airlines

before the Federal High Court. The matters are still pending before the Federal High Court in Lagos. AMCON converting Arik’s planes for Nigerian Eagle’s use will most likely result in litigation from the original founders of the airline.

You all would recall that there were rumours that Ethiopian Airlines wanted to buyout Arik in 2017 but the founders threatened to sue Ethiopian if it goes ahead with the deal.

With respect to Aero Contractors, the new airline does not intend to take over the facilities of Aero. The Ibru family has 40% stake in the company and are aware of the changes. This now leads to the next question:

Does AMCON have powers to convert some of the airplanes belonging to the two airlines to its new carrier? Section 34 of the amended AMCON Act 2019 gives AMCON the rights over acquired bank assets.

The acquired bank assets in this case are companies and assets belonging to the indebted companies. The section gives AMCON legal rights over the indebted companies' assets. The acquired bank assets in this case are companies and assets belonging to the indebted companies.

The section gives AMCON legal rights over the indebted companies' assets. Thus, AMCON has acted within the ambit of the law giving it the powers and can transfer the said airplanes to the new companies to recover its debt.

The decision of AMCON to float a new airline out of the two airlines is an innovative strategy to recover its debt and also to play the role of the national carrier. However, the new carrier is not related to the proposed national carrier of the ministry of aviation

Any litigation against AMCON in the light of the agency's decision to float a new airline using planes belonging to the indebted airlines in its fold is not going to be successful as the agency is acting within its powers as provided in the AMCON act.