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, according to the Sun.
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.
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.
According to the Sun, 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.
Mr. Simon Tumba, media consultant to Arik Air 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.