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Jimoh Ibrahim's Air Nigeria Faces Financial Melt Down

Source: huhuonline.com
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Barely a year and two months after staking $250 million to acquire Virgin Nigeria which he later christened Air Nigeria , the airline belonging to Jimoh Ibrahim may be living in its last days. When he bought over the company at the second quarter of last year, he promised to make the airline the envy of other airlines and the country, but today, the reality that has befallen the others have also crept into his.  

 
  Huhuonline.com gathered that Mr. Ibrahim who has jumped into various businesses under the umbrella of the Nicon Group, had anticipated that by the middle of this year, he would have made more than half of the money he invested in the business.  

 
  According to sources close to Ibrahim, he abandoned the EAS Airways which he bought and rebranded as NICON Airways shortly after, but the ensuing confusion about how to begin put him off till he bought over Virgin Nigeria, a name he though Richard Branson had sold very well and would be easy to market. He also promised to merge the two airlines into one, but this has not been achieved till date.  

 
  He was quoted as saying that the turn-around plan of Virgin will start with the diagnostic review of all files and status report and may take up to two years to complete.  

 
  But frustration crept in, according to sources close to the airline, when he realised that the business environment under which airlines operate in the country is very harsh.  

 
  As a result of this, the airline has incurred some debts and have grounded some of its aircraft as Huhuonline.com learnt that only one of the two aircraft the company inherited has been put to major use for sometime now. It was further learnt that staff of the company are being owed for different months with no hope of payment in sight.  

 
  As if the challenges facing the organisation was not enough, the Lagos state Inland Revenue Service Wednesday stormed the airline's corporate office located in Etiebet's Place on Bank Anthony Road , Ikeja, Lagos with several mobile policemen and sealed it off. According to the Lagos state government, the airline was owing about N500 million as tax, which it had evaded for about five years. LIRS officials said they took the action after efforts to push the airline to pay the said tax ended in frustration.  

 
  The tax evasion actually began before he bought over the airline, but the state government argued that it was no excuse for him not to pay it since by acquiring the company, he also acquired its assets and liability.  

 
  An official of the airline who confided in Huhuonline.com through a telephone call Friday night confirmed the financial challenge facing the organisation adding that it had also affected their daily activities.  

 
  "As I am speaking with you now, I am being owed salary for some months and nobody is forth coming with the way forward. The owner of the airline too is always full of himself and believes he knows more in every situation.  

 
  "He has never given the management of the airline the opportunity to work without interference. These people have been into the job for a very long time, yet he would not just allow them to work and put the airline in sound footing. He is to blame for not taking other people's advice and acting on them," the source who pleaded anonymity said.  

 
  The source said that the businessman, who had become aware that the airline may be heading for a final rest, has directed that there should be a cut in the overhead cost of the airline. "To do this, he has directed that staff be retrenched. This comprises of both junior and senior staff. He has also directed the slashing of our salaries, the same salary he is owing, by 30 per cent and has told us to leave if we can't take it.  

 
  "In the next few weeks . According to the management, the airline would be taking some major decisions which they have failed to tell us about. They have only told us to watch and see how things unfold," the source added.