Home Aviation AMCON blames Nigeria airlines’ failure on corporate governance, lavish lifestyles of owners

AMCON blames Nigeria airlines’ failure on corporate governance, lavish lifestyles of owners

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The Managing Director, Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, yesterday, attributed high mortality rate of airlines in Nigeria to absence of corporate governance.

He, however, challenged the regulatory agency, Nigeria Civil Aviation Authority (NCAA), to deepen its oversight of airlines by ensuring they have strong corporate governance principles.

Kuru spoke in Lagos, yesterday, at the 3rd edition of the colloquium organised by the Nigeria Travel Market (NTM), stressing that the regulations of the industry should be much deeper than even the health or banking sectors.

AMCON is the recovery arm of the Federal Government which two years ago took over two airlines, first Aero Contractors and then Arik Air, making the government one of the biggest airline operators as at today.

In the last 50 years of aviation in Nigeria, over 40 airlines have gone under with stakeholders expressing divergent opinions on the immediate and remote causes of their mortality.

But the AMCON boss insisted that at the heart of the collapse of airlines is the absence of corporate governance with operators flooding their boards of directors with family members while some engaged in lavish lifestyles.

He said, “Board of directors are represented by “father, mother, son” who have no any form of aviation/airline training to qualify to be on the board.

“Also, the lifestyle of owners takes precedence over payments to pilots, engineers etc and owners and staff are contractors for service, thereby compromising standards and quality. In most cases overpricing services.”

Kuru also decried a situation where airlines opened new routes without proper and adequate planning, saying, “Most airlines enter into trouble the moment they enter into the international route, where it is difficult for them to compete.”

He advised NCAA to display ample courage “to enforce compliance based on current standards, or needs more fine tuning to ensure effectiveness of the airline.”

The MD reiterated that NCAA is important in driving the corporate governance practice of any airline as entrenching the principle requires rejigging of regulations as self-regulation has not worked over the years.

SOURCE: DAILY TRUST

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