Aero Contractors Fires 900 Workers

Posted by African Examiner Aviation, Business News, Featured, Latest Headlines Friday, March 17th, 2017

(AFRICAN EXAMINER) – Aero Contractors Airline, which is under the management of the Asset Management Corporation of Nigeria (AMCON), has sacked about 900 workers representing 60 per cent.

Letters of redundancy were issued to the affected employees during the week.

Media Consultant to the 58 year-old airline, Mr Simon Tumba, who confirmed the development in a statement issued on Thursday in Lagos, said the workers would be paid their pension and gratuity.

Aero as at last September had about 1,500 workers on its payroll before it suspended flights. AMCON had taken it over in 2013.

Tumba said the airline had been grappling with huge and unrealistic personnel cost as well as other operational challenges, worsened by lack of enough aircraft to keep all the workers meaningfully engaged.

“The issuance of notification of redundancy is a business decision that will ensure Aero’s survival.

“The current situation where over a thousand people are basically not engaged due to lack of serviceable aircraft is not sustainable for the airline.

“The huge monthly salary associated with a bloated workforce will eventually kill the airline, which is not the intention of the current government,” he said.

According to him, Aero Contractors currently has aircraft-to-employee ratio of 1:500, which analysts believe is perhaps the worst in the history of global airline industry.

Tumba said government’s intervention in Aero was to save it from total collapse. Therefore, he said, all steps such as this (issuance of redundancy letters) to ensure its survival must be put into effect to save the airline.

”This decision will immediately reduce the whopping operational cost, which has been stifling Aero; enable the management bring in more aircraft through savings from overheads and pay for C-checks.

“It will also enable Aero have a more manageable and committed workforce in line with international best practices of 50 to 60 personnel to one aircraft unlike what obtains in Aero at the moment.”

He, however, added that those in Maintenance Repair and Overhaul (MRO) and other essential staff in critical departments would not be affected.

Tumba said Capt. Ado Sanusi, the Chief Executive Officer of Aero, had also assured the workers that they stand a chance of being recalled as soon as the airline increases the number of aircraft in its fleet in the near future.

One of the redundancy letters made available to NAN read:, “Following the operational challenges of Aero culminating in loss of business opportunities that adversely affected company finances vis-à-vis operations, we are constrained to place you under redundancy pending a possible future review.

“This decision was communicated to the unions where their understanding was solicited in view of prevailing operational difficulties.

“Whilst Aero appreciates your contribution to the company and continues to regard you as worthy ambassadors, we solicit your understanding as we struggle to stabilise operations and rebuild the company.”

However, the National Union of Air Transport Employees (NUATE) and the Air Transport Senior Staff Services Association of Nigeria (ATSSSAN) , have kicked against the move by the airline.

Mr Frances Akinjole, General Secretary, ATSSSAN, told NAN that a notification had been sent by the unions to the affected workers not to accept the “purported letter of redundancy “.

“We are totally against it because in the first place, our members are still being owed salaries and we have not even negotiated the redundancy package.

“If they go ahead with this move then the unions are prepared to face them headlong,” he said.

According to Wikipedia, Aero Contractors was founded in 1959 and officially registered in Nigeria in 1960. At that time, it was a wholly owned by Schreiner Airways B.V. of the Netherlands.

It became a company with initially 40 per cent Nigerian holding in 1973 and subsequently 60% in 1976, anticipating the requirements of the Nigerian Enterprises Promotion Decree of 1977, also known as the indigenisation decree.

In January 2004, Schreiner Airways was bought by CHC Helicopter (CHC), which acquired a 40% holding in Aero, while the 60% majority share remained within the Ibru family.

On 1 July 2010, CHC sold its interests in Aero for the consideration of 1 Nigerian naira, when Aero became wholly owned by the Ibru family.

In March 2013, industrial action grounded flights for 18 days, in a dispute over outsourcing and reduction in staff numbers. The strike, from 13–28 March, grounded Aero’s active fleet of nine aircraft, and was reported to have cost the airline at least N10bn in ticket sales

After financial intervention, the Asset Management Corporation of Nigeria (AMCON), an arm of the Federal Government of Nigeria, held 60% of Aero, and in August 2013 AMCON took over the management of the carrier.

Hugh Fraser was named as CEO then.

The current CEO is now Captain Ado Sanusi, who himself replaced Captain Fola Akinkuotu, now managing director of Nigerian Airspace Management Agency./NAN