A timeline: The downfall of Aero has been 16 years coming

Aero Contractor aircraft

As I now read news of Aero contractors suspending all its services from the first day of September (that’s tomorrow), I cannot help but sigh.

Partially in relief for this company that has been in and out of distress for almost 16 years and partially because it’s just so sad.

Aero is Nigeria’s first airline having been in existence since 1959. The company has had this coming for a few years now.

This timelines explains just what we mean.

Let’s start right at the beginning, shall we?

Aero was registered as a Nigerian company in 1960 and although fully owned by a foreign parent company, the Schreiner Airways B.V in Netherlands, there was at least 40% Nigerian holding in the company. The Nigerian stakes grew over the years until finally in 2004, at least 60% of the company’s shares belonged to the popular Ibru family. This, we submit is where it started to go downhill for the airline. Well, not immediately.

2010

The status quo remained until February, 2010 when the company that acquired Schreiner Airways, the Canadian CHC Helicopters sold its shares in Aero to the Ibru family. For 1 Naira. Yes, you read that right- NGN 1:00k. It’s not that CHC sold all its shares in Aero to make the company fully owned by the Ibru family, it is that whooping 40% shares were sold at 1 Naira. Obviously something was not right with the company.

2013

By March of 2013, the decline had started manifesting itself. An industrial action by Aero Contractor staff grounded all the airline’s flight for 18 days. The staff were angry about Aero outsourcing; thereby reducing staff numbers and also poor working conditions. This strike action lasted from the 13th of March till the 28th . After the Senate helped to broker a deal between management and striking workers, operations eventually resumed but the strike had reportedly cost the airline 10 billion Naira in ticket sales. Although, some reports say it cost the company several millions in U.S. Dollars but that’s not the issue is it?

After operations resumed, customers had become skeptical. Aero’s sales dipped further. Aero Contractor’s management conducted an appraisal of its staff in the following three weeks promising to lay off staff that did not meet the requirements.

The deed had already been done. Money lost, brand integrity cut by half. This was only March, the first quarter of the year.

By August 2013, the Federal Government agency that handles distressed companies (usually also steeped in debt) had acquired 60% of the shares in Aero Contractors from the Ibru family.

By this time, AMCON had already invested 20 billion naira in Aero after the airline was forced to source about USD 124million in funding from the institution’s Aviation Intervention Fund as a means of shoring up its financial footing.

2016

Fast forward three years and several scandals and publicized customer dissatisfaction stories on, Aero contractors is ready to shut down operations.

But it gets worse in 2016 for Nigeria’s first carrier flight company.

Stranded passengers.

stranded aero contractors customers
stranded aero contractors customers

In February 2016, hundreds of Aero’s passengers were stranded at the Murtala Muhammed 2 airport because the airline could not buy aviation fuel to ferry its aircrafts. There were reports that this was because Aero was already so indebted to its suppliers that the latter were not ready to grand anymore credit facilities.

Lay offs

In April 2016, at least 100 workers outsourced to Aero Contractors by Skyborne Ltd were laid off in the name of “reorganising and repositioning its business”. The best guess is that the company was already neck deep in debt again.

AUGUST

On the 22nd, reports surfaced that Aero’s financial crises had worsened and the company was going to lay off some more workers.

Today is the 31st of August and the News is that Aero will be suspending all its operations from tomorrow.

We definitely cannot say we didn’t see that one coming.

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 active providing services to various clients and the general public.

According to the CEO, Fola Akinkuotu, the implication of the suspension of scheduled services operations extends to all staffs directly and indirectly involved in providing services as they are effectively to proceed on indefinite leave of absence during the period of non-services.

 

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