A N34 billion debt owed a
first generation bank may
have contributed to the
shutting down of Air
Nigeria’s operations as
announced by its
management on Tuesday.
The airline, formerly known as Virgin Nigeria, was acquired from British millionaire Richard Branson and other Nigerian investors, on June 2,2010 by a local businessman Jimoh Ibrahim, for N37 billion (about $250 million). The N34 billion debt is a legacy debt inherited by Ibrahim, when he bought Virgin Nigeria.
On Tuesday, a statement from Ibrahim aides said
Air Nigeria was suspending all its local, regional
and international operations with effect from
Monday, September 10, 2012. The airline said the
suspension was largely due to staff disloyalty and
environmental tension, “which are not conducive for
business in the aviation sector.”
The statement which said only 50 out of Air
Nigeria’s workforce were retained to fashion out
modalities for its resumption of operations, added
that flight operations would resume within 12
months.
The N34 billion owed a local bank (name withheld)
sources in the aviation sector said last night,
coupled with fears of a forced merger being muted
by the Federal Government, could have contributed
immensely to the sudden suspension of Air
Nigeria’s entire operations. The Federal
Government, it was learnt, is planning to force local
airlines in the country to undertake mergers to form
the kind of synergy needed to provide safe and
quality airlines that could compete with European
and American airlines which are making fortunes
on Nigerian routes.
Air Nigeria’s domestic and regional routes were
suspended in June this year, first by the airline’s
management, when its pilots went on strike, and
later by the Nigerian Civil Aviation Authority
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