Arik Airlines: KPMG Undertakes Forensic Audit, Intervention Helps

The new management of Arik Airlines has appointed KPMG, world-class financial experts to undertake a forensic and diagnostic audit of the finances of the airline to ascertain the true status of its finances.

According to the statement, the review will among other objectives cover the position of assets and liabilities, and their utilization; recording and utilization of loans, propriety of third party transactions; fraud controls over Procure to Pay ('PtP'), Agents and Business Partners and Financial Reporting and Arik Airline's financial position as at January 31, 2017. The report is expected to be delivered within 12 weeks.

"We have hired KPMG to look into the financials of Arik with a tooth comb and advise us with verifiable facts on what went wrong with the airline. We need to do that because the outcome will help us plug the loopholes and stabilise the airline," the statement added. The whole intention is to identify what went wrong with Arik to enable the new management to bring it back to full operations.

The federal government intervened last Thursday February 9, 2017 in the airline following daunting complaints of huge indebtedness of the airline to various creditors and the frequent interruptions in its operations, and the concern to safety and security

Government Intervention Helping Arik To Stay Alive
Within 24 hours of intervention by the government, Arik Air is receiving assistance to be able to offer flight services.

Following it's intervention yesterday, it has now been gathered that virtually all of Arik's trade creditors are being owed, staff salaries have not been paid for between 4- 6 months, and of the 28 aircraft in Arik's fleet, only 10 are in operation.

Due to AMCON's intervention, flights are operating and the insurance cover for the aircraft which would have expired on Sunday, 12 February has now been sorted and trade creditors and fuel marketers have been assured that all indebtedness will be looked into; they have offered to support the new management to get operations run smoothly.

Flight schedule may therefore be realigned to match the 10 aircraft in the fleet, while also sorting out the myriad of problems confronting the airline.

It is obvious that without Government intervention Arik would have virtually stopped operation by Monday of next week.

AMCON is making efforts to return the aircraft in various parts of the world in repair yards, with the aim of stabilizing the airline to offer safe, secure and timely services to customers.