It has been revealed that Aero Contractor, which suspended flight operations Wednesday, closed shop due to over N50bn debt.
Also, the entire 1,500 workers of the airline have been sent on indefinite leave while the industry unions were informed of the suspension of the flight operations Wednesday.
This is as the entire counters of the airline at the Murtala Muhammed Airport Two, MMA2, were shut while passengers who had hitherto bought air tickets and given boarding pass were seen going to the baggage reclaim area to retrieve their check-in luggage.
A source close to the airline told our correspondent in confidence that the airline is indebted to various agencies including lessors, banks and even the Asset Management Company of Nigeria, AMCON.
For instance, the airline according to the source owed between N18 billion and N20bn in trade debts, AMCON, N14 billion, fuel marketers and other aviation agencies about N15 billion.
The source explained that the revenues made by the airline on a monthly basis could not pay its wages including salaries and other bills.
The source said, ‘‘the airline is not meeting its schedules and the service has been epileptic. It’s a painful decision for the airline to take. Aero has a high rate of high trade debt to lessors, banks, AMCON and others.
“The brand value has eroded among air travellers despite support by AMCON. I am sure AMCON is seriously looking for a way to revitalise the place. The airline collapsed also because of the disagreement between the management and unions because the staff insist on their regular payment and completely negated reduction in their wages.’’
The source however said the airline would still continue to operate its Rotary wing and Maintenance, Repair and Overhaul, MRO, facility.
The source further explained that the airline may not resume anytime soon.
On suspension of flight operations, the media consultant to the airline in a statement quoted the Chief Operating Officer, COO, Capt. Fola Akinkuotu, as saying that 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 the scheduled services operations. These factors, according to him, are both internal and external environmental factors that have made it difficult for the foremost airline to continue its scheduled services.
He said during the period in review, Aero, which was hitherto revered for its safety, timeliness among other virtues witnessed epileptic operations and services to the external publics 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, 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 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.