There were strong indications yesterday that more than 1,500 of Arik Airline’s estimated 2,000 workforce may be retrenched this month as new management’s cost-saving measures to keep the airline alive.
Arik Air has about 2,000 workers spread across its local and
foreign operations, while it operated a fleet of 28 aircraft at optimal
capacity, which enabled it to generate enough revenue to meet its over
N1 billion wage bill.
But reliable insider sources told Daily Sun yesterday that the
airline currently under the Asset Management Corporation of Nigeria
(AMCON) receivership is now operating with only eight functional
aircraft in its fleet which makes retain its 2,000 workforce
uneconomical.
Daily Sun learnt that the company’s expatriate staff may be the
first to be disengaged, especially with the suspension of flights on
international routes. It was further gathered that some of the
expatriate pilots have on their own left the country, while several
indigenous pilots and cabin crew are also reported to be experiencing
some form of redundancy, with the scaling down of the airline’s
operations.
“With a drastic reduction of fleet from 28 to eight as well as
reduction in scheduled flights from 120 to an average of 18 flights
daily, there are strong indications that Arik Air would retrench most of
its workers, as its revenue continues to dwindle and the number of air
worthy airplanes dwindles,” the source said.
“That is the only way to cut down the overhead and keep the
airline alive. But with a current monthly revenue of N1.5 billion, which
is not enough to meet operating costs, offset aircraft insurance bills
or pay its creditors, staff retrenchment may happen any time within the
first quarter of this year"
"The tragedy of Aero Contractors was the inability of AMCON to
sack its over-bloated workforce even when fleet had depleted from 12 to
just three. The same mistake can’t happen with Arik,” the source, a top official of an airline who wouldn’t want to be named, said.
Meanwhile Media Consultant to Arik Air, Mr. Simon Tumba, has,
however, refuted the alleged planned mass sack at the company saying
there were plans to lay off workers. According to AMCON, what Arik Air
requires to regain its full capabilities was an injection of about N10
billion.
But aside the challenges of fleet depletion and reduction in daily
flight frequencies, Arik Air is also grappling with the problem of low
passenger patronage. The recent takeover of the airline by AMCON has
created some fear in most of its frequent flyers who mistook the events
as an indication that the airline is no longer safe.
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